A shift in Egypt's neighbourhood policy with Sudan targeting food security, though late, is more than welcome, Mona El-Fiqi reports Egypt took the initiative to begin a new phase of cooperation with Sudan when Prime Minister Essam Sharaf visited Sudan in April. The visit, which was received warmly by the Sudanese government as well as the public, was followed by a meeting of the bilateral high committee for trade and agriculture which met in Cairo from 22 to 24 May. The aim of the meeting was to discuss means of developing bilateral relations in different sectors targeting food security for both countries. Egyptian officials gave a clear message during the meeting that boosting trade relations with African neighbours, particularly Sudan, is given priority. Samir El-Sayad, minister of industry and foreign trade, explained that Egypt is currently applying a policy that aims at achieving comprehensive integration with Sudan which can help in raising the living standard of people in both countries. El-Sayad added that encouraging Egyptian businessmen to invest in Sudan is on the top of the government's agenda since it will help to open new markets for Egyptian exports and increase foreign currencies. Sudan can be a gateway to other African countries for some high potential Egyptian exports such as cement, steel, fertilisers and food products, according to El-Sayad. Representatives of the Sudanese government asserted that the door is open for Egyptian investors to establish new projects in Sudan. Fadel Abdallah, Sudanese minister of foreign trade, invited Egyptian businessmen to visit Sudan to find out the market's nature and size. It is a big market with 40 million consumers and with less production costs than any other country, according to Abdallah. Awad Ahmed El-Gaz, Sudanese minister of industry, said that it is important to use each country's human and natural resources, and at this stage, the government's role is to provide facilities to investors, to establish projects as partners to achieve the greatest benefit for the people in both countries. There are different fields of cooperation between the two countries, such as agriculture, industry and trade. In the agricultural sector, the committee approved the establishment of an experimental farm on 100 feddans in North Sudan to plant wheat starting from this season. Moreover, a feasibility study is currently carried out to plant 1.2 million feddans in Sudan. This agricultural plan aims at achieving self- sufficiency of wheat for both countries. Expanding cultivation in Sudan is also expected to include some other crops such as sunflower, soya beans and sesame to help fill the gap between the production and consumption of cooking oil. Egypt produces 10 per cent of its total consumption of cooking oil. The plan also includes planting sugarcane and sugar beet. To achieve food security in both countries, Ayman Abu Hadeed, minister of agriculture and lands reclamation, said that cultivation in Sudan should be accompanied with industrial projects. For example, planting sugarcane and sugar beet should be accompanied with the establishment of a sugar factory. As for the industry sector, last week the joint committee approved the establishment of an Egyptian industrial zone in Sudan on two million square metres, including a complex for producing leather products. An Egyptian delegation from the Industrial Development Authority is expected to visit Sudan soon to determine the place of the complex in accordance with power and water sources. Importing meat from Sudan is one more important sector which officials agreed to provide facilities to boost in order to fill the gap between consumption and production. However, officials admitted that there are some obstacles that currently hinder boosting trade relations, such as transportation and financing for such large scale joint ventures. As for transportation and opening borders, El-Gaz said that a higher committee will be held to facilitate the movement of individuals and commodities between Egypt and Sudan. El-Gaz asserted the importance of taking action as soon as possible in order to compensate the delay in building joint ventures. Finance is another problem facing the establishment of joint ventures. As for agricultural projects, Abdel-Halim Ismail El-Motaffi, Sudanese minister of agriculture, said that financing can be easily provided through different sources such as banking finance, investment funds, international organisations and the private sector resources. In boosting trade relations with Sudan in different sectors, Minister of Industry and Foreign Trade El-Sayad explained that the private sector is expected to play an important role. The government can provide free lands to establish projects, such as industrial and agricultural zones, and can help in creating a friendly investment environment by providing a package of incentives attracting investments. As for financing, El-Sayyad suggested that the government can also start paying 10 per cent of a company's capital as seed money, and offer the remaining to public subscription to help in establishing joint ventures in both countries. The Sudanese government agreed to lower the minimum capital for the banking unit which the National Bank of Egypt (NBE) plans to establish in Khartoum to $50 million, down from $100 million. The decision is expected to encourage other Egyptian banks to establish branches in Sudan in partnership with Sudanese investors. To transform words into concrete steps, a memorandum of understanding was signed last week between the Egyptian Junior Businessmen and the Sudanese Society for Business Owners to start cooperation in joint ventures. Experts have praised the government's move to target cooperation with Sudan in trade, industry and agriculture. Ashraf Kamal, professor of agricultural economics at the Agriculture Research Centre, said that it is a step on the right track. "When dealing with the issue of cooperation with any country in general, and with Sudan in particular, Egypt should remember always that it is a food importer, and that the gap between its production and consumption is increasing with time. Looking for means to fill the gap in Egypt's food needs with Sudan should be given priority since local water and land resources are very constrained," Kamal explained. Hussein Hegazi, professor of economics at Mansoura University agreed with Kamal that it is a good step, but argued that this move is late. "Egypt signed an economic integration agreement with Sudan in 1982, but for political reasons, nothing was achieved, while other Arab and non-Arab countries had already established agricultural projects in Sudan," Hegazi said. To guarantee the sustainability of these projects, Hegazi explained that it is preferable to invest in public and private joint ventures between both countries. For example, land ownership should be shared in clear contracts to achieve integration. "We have well-trained labour, technology, experience and scientific research, while Sudan has water, high quality soil and suitable weather," said Hegazi. According to Hegazi, the government should keep a sizable share in such projects to prevent the private sector from controlling prices. "The whole issue would be in vain if private sector companies get benefit from low production costs in Sudan and sell products to local consumers at international prices," Hegazi said. In response, Egyptian investors complain that the Sudanese government is currently applying a ban on a long list of Egyptian food exports. El-Gaz explained that for internal reasons, Sudan is facing a high demand on foreign currency so it bans importing some products in an attempt to reduce demand on foreign currency. El-Gaz asserted these procedures are taken in temporary circumstances.
