Egypt and Russia are set to take joint business relations to new heights this year, Ahmed Kotb reports Egypt and Russia have high hopes to take their joint trade and investment projects to higher levels in 2010. The most anticipated projects would be establishing a free trade agreement (FTA), building wheat silos in Egypt and starting off midrange technology projects. "We aim to double the current $2 billion bilateral trade volume with Russia in a few years," said Rachid Mohamed Rachid, Egyptian minister of trade and industry, in a recent meeting in Cairo with his Russian counterpart Viktor Khristenko who promised that 2010 will witness a new phase of Russian-Egyptian business relations. The Russian minister stressed that his country will initiate massive projects in the manufacture of heavy machinery, aircraft and automotives. Both Rachid and Khristenko wish to finalise FTA negotiations before 2010 ends. Many Egyptian products have entered the Russian market lately for the first time, Rachid said. These include construction materials, strawberries and pomegranates, as well as electrical machines. Citrus fruits, potatoes, onions, fresh fruits, carpets and other textile-based floor coverings, as well as women's garments, centrifuges and filters are all among Egypt's main exports to Russia. "Agricultural goods became a main part of our exports to Russia since 2007," Sherif El-Maghraby, chairman of the EgyptianRussian Business Council, told Al-Ahram Weekly. He added: "exporting agricultural products to Russia was not part of trade between the two countries before that date, mainly because it was only in 2005 when our agricultural farms started to become qualified by professional international institutions and gain global confidence." El-Maghraby said citrus fruits are at the top of the list of Egyptian goods exported to Russia, with an estimated 150,000 tonnes exported annually. Topping the list of Russian exports to Egypt meanwhile is wheat. It accounts for 30 per cent of overall Egyptian imports of wheat. Other exports from Russia include semi-finished steel products, flat roll iron, plywood, veneered panels, copper wire, aircraft, spacecraft and launch vehicles, sulphur and transporting vehicles. Further cooperation is expected between the two countries in 2010 in the fields of automotive assembly, heavy industrial equipment and fast moving consumer goods (FMCG) such as food and soft drinks. Bilateral trade between the two countries reached $2.07 billion in 2008 with Egyptian exports to Russia standing at $191.6 million and imports from Russia standing at $1.88 billion. Rachid stressed that Egypt and Russia want to reach a $4 billion bilateral trade within few years. Among the new Russian investments in Egypt announced during the joint meetings is the building of huge wheat silos that would, according to El-Maghraby, supply Egypt and some regional countries with Russian wheat, making Egypt a strategic Russian wheat centre. Minister Rachid recently announced new regulations imposed on wheat imports from Russia to ensure the quality of shipments. Egyptian-Russian trade relations were only slightly affected by the global economic recession. According to El-Maghraby, bilateral trade between the two countries in the first quarter of 2009 jumped seven per cent in comparison to the same period of 2008, "challenging the economic crisis and proving a special relationship between Egypt-Russia," he said. However, Rachid said the establishment of the Russian industrial zone, which was announced in 2007, was delayed because of the economic crisis, but one million square metres are still available in Borg Al-Arab City near Alexandria for the zone. Talks with Russian companies about projects to be implemented in the zone are still in progress. "What we need from Russia in the coming days is midrange technologies [technologies that do not entail large amounts of capital and research, such as mobile phones]," El-Maghraby pointed out. He added that midrange technologies would benefit many sectors in Egypt if developed properly. According to El-Maghraby, Russia has the needed research centres to develop these technologies, but they lack funding. "Currently, both the Egyptian and Russian private sector are establishing a $300 million investment fund dedicated mainly to reviving these research centres," he added. As for Egyptian investments in Russia, El-Maghraby said they amount to some $250 million and are mainly in the area of manufacturing cables and melting raw iron. But while Egyptian investments are growing the same cannot be said of Egyptian labour. "We only have few hundred Egyptians working there," he said, explaining that the difficulty of obtaining work permits is the main reason for the small number of Egyptian workers in Russia. Russian cumulative investments in Egypt amounted to LE727.3 million in April 2009. These investments are mostly in the tourism sector, real estate and automotive production. According to El-Maghraby, Russian tourists represent 14 per cent of the overall number of tourists who visit Egypt every year. Some 1.8 million Russian tourists visited Egypt in 2008, making Egypt a preferred destination for Russians.
