DP World committed to Sokhna DP WORLD, the global marine terminal operator, is likely to put a hold on expanding its operations in Egypt for the time being. DP World had acquired a 90 per cent stake in the Sokhna Port Development Company -- the concession holder and operator of Sokhna Port -- for $670 million in early 2008. DP World CEO Mohamed Sharaf was quoted by Al-Masry Al-Yom newspaper as saying that in light of global circumstances and the slow demand for freight it would be illogical to expand capacity without careful study of market needs. However, he assured that the company would honour its current commitments with the government and private sector. Sokhna is the 43rd terminal in DP World's global portfolio. Although DP World is an affiliate of Dubai World, the Dubai government recently said that DP World and its debt are not part of the restructuring of Dubai World. Observers believe this move was meant to shelter the profit-making company and ease shareholder fears that it could be used to sustain less healthy companies Business matchmaking ON 7 DECEMBER, Rachid Mohamed Rachid, minister of trade and industry, and France's minister of foreign trade, Anne-Maried Idrac, inaugurated the bilateral business matchmaking forum, Med-Allia during Idrac's four-day official visit to Egypt. The ministers held a bilateral meeting during which they discussed the status of cooperation between Egypt and France on the commercial level. They also discussed ways forward in light of what appears to be an easing of the international economic crisis that plagued developed economies for much of 2009. Despite the crisis, Egyptian-French trade grew by 25 per cent. During the meeting, the ministers also discussed the Union for the Mediterranean and its role in cementing relations between countries north and south of the Mediterranean. During the inauguration of Med-Allia, a business matchmaking forum designed to cater to the needs of small and medium-sized enterprises (SMEs), Rachid noted that both Egypt and France are committed to supporting the development of stronger cooperation between SMEs in Egypt and France as well as the Euro-Mediterranean region as a whole. "There is a strong agreement between Egypt and France that there needs to be more support for SMEs from governments in order for them to continue to grow and expand their role in the region's economic development," noted Rachid. "Business forums such as Med-Allia are particularly important because they are designed not only to bring SMEs from all over the region together in one room to explore opportunities for them to do business together, it also serves as a platform for them to identify challenges to SMEs growth in the region and even ways to address them." According to Rachid, big companies usually have the tools and means to help them identify and address challenges as well as market for themselves and their products in their target markets; SMEs need support because they may not have such resources. Business forums such as Med-Allia, which brings together some 300 companies from nine countries, can help SMEs identify growth opportunities. Participating countries include Egypt, France, Morocco, Tunisia, Libya, Turkey, Syria, Jordan and Lebanon. Companies from the nine countries work in a variety of sectors including agriculture and food industries, engineering industries, consumer goods manufacturing and distribution, construction, energy, communication and information technology, textiles, pharmaceuticals, tourism and handicrafts. Later today, Ministers Rachid and Idrac will head the fourth session of the Egyptian-French Business Council during which they will discuss with French and Egyptian companies ways to further coordinate cooperation between the Egyptian and French private sectors. Conditional recovery A UN REPORT expects the global economy to grow by 2.4 per cent in 2010, though recovery is still "fragile". The United Nations World Economic Situation and Prospects (WESP) 2010 report to be released in January predicts that the world economy will bounce back next year, but warns of a risk of a double-dip recession if misguided policies are implemented. The WESP report, issued annually, credits massive incentive packages injected into economies worldwide since late-2008 for the expected rebound. It recommends that the packages continue at least until there are clearer signs of a more robust recovery of employment growth and private sector demand. "This is an important turnaround after the freefall in world trade, industrial production, asset prices, and global credit availability which threatened to push the global economy into the abyss of a new Great Depression in early 2009," the UN report says. The report notes that while an increasing number of countries showed positive growth since the second quarter of 2009, and the recovery momentum continued to build in the third quarter, "because of the steep downturn at the beginning of the year, world gross product is estimated to fall by 2.2 per cent for the year 2009." The report further warns that "the recovery is uneven and conditions for sustained growth remain fragile." It notes that firms have mainly begun to restock inventories, rather than respond to stronger consumer or investor demand. The report also cautions against potential risks from a widening United States deficit and mounting external debt that could cause a "hard landing of the US dollar and cause a new wave of financial instability." According to the report, economic growth next year will be strongest in developing countries, particularly in China and India, which are expected to grow at 8.8 and 6.5 per cent respectively. However, this growth should not be interpreted as progress in poverty reduction. While fewer developing countries in 2010 are expected to suffer declining per capita incomes, fewer countries will also achieve the threshold economic growth rate of three per cent or more, the minimum needed to ensure substantial poverty reduction. Untapped e-commerce ALTHOUGH Egypt enjoys a significant Internet penetration rate estimated by the Ministry of Communications and Information Technology (MCIT) at approximately 16.7 per cent (12.57 million users) in 2008, Egyptians are not considered great e-commerce consumers. According to Omar Soudodi, general manager of Souq.com Egypt, the largest marketplace and auction website in the Arab world, Egypt is lagging behind other countries internationally when it comes to broad adoption of e-commerce services. "There is a need for service providers to adopt business models that boost confidence among Egyptians to utilise the Internet more at work and in their daily lives," he said. Nevertheless, the growth opportunities for Internet service providers and providers of online services are tremendous in the Egyptian market, particularly since the market is underserved and a much larger portion of the population is yet to be introduced to a broad range of online services. E-commerce experts identify some inherent factors that have impeded the adoption of Internet and advanced e-commerce services including lack of trust in the security and authenticity of e-commerce in general, the lack of alternative electronic payment facilities and low penetration of credit cards in the Egyptian market. Other social factors negatively affect the penetration of e-commerce into the market, such as resistance to change and to modern IT based approaches to purchasing and conducting business. Soudodi underlined that although ministries and other government-related organisations are now making full use of all Internet services, small and medium-sized enterprises (SMEs) still need to embrace the information economy. "SMEs make up the majority of Egypt's private sector. They must be empowered to take full advantage of the sales and growth potentials that the Internet offers," said Soudodi. According to MCIT statistics, out of the 60 per cent of large Egyptian enterprises turning to the Internet, almost 80 per cent are using the Internet for sending and receiving e-mails, while only 26 per cent of these enterprises are leveraging the Internet to deliver products or services online.
