Businessmen and the government are teaming up to provide fast solutions to the financial crisis Egypt is swimming in, reports Sherine Nasr Every cloud has its lining, even the current financial turmoil. Although experts are fully convinced that it will have long-term impact on the national economy, the nature of debate it has created among businessmen and the government over what needs to be done is a sign of maturity. For their part businessmen's associations have grown deeply involved in preparing working plans to overcome foreseeable troubles in various sectors. The latest was submitted last Sunday by the Egyptian Businessmen's Association. A whole array of procedures was suggested to contain possible negative effects. Fortunately, it seems the tourism sector promises great potential if opportunities are seized to the full. "Egypt stands a golden chance based on its natural and cultural attributes in addition to the fact that tourists can enjoy the best services for the cheapest prices," said tourism tycoon and former chairman of the Egyptian Tourism Federation Ilhami El-Zayat, who refused to accept suggestions that tourism in Egypt would be affected within the next three months. In his view tourism to Dubai has been negatively affected precisely because it is an expensive destination. A recent survey on tourism trends published by the World Tourism Organisation revealed that tourists are growing more resilient when it comes to travel. "In other words, travellers will go visit places anyway. The bottom line is to find reasonably priced destinations and that is one great asset that we should work on," added El-Zayat. Notably, tourism contributes some 5.6 per cent of the national GDP, while industries that feed into the tourism sector provide 6.2 per cent. "Seventy per cent of our tourism income comes from Europe. But we need to study the would-be consumer during the next phase so that we can deliver the right message," said El-Zayat, who added that the Ministry of Tourism has a great role to play in this respect. Although the number of visitors to Egypt is not expected to decline, tourism's feeding industries definitely face some tough times ahead. "No further expansions are likely until the market is more settled, and this will reflect negatively on these industries which will most probably go through a period of recession," he said. As for the industrial sector, Egypt has managed to achieve some eight per cent industrial growth in 2007-08, compared to five per cent in 2005, while industrial exports increased from LE18 billion to LE63 billion for the same period. "The plan is to increase industrial growth by 10 per cent by 2011 while industrial exports should reach LE75 billion," said Amr Assal, chairman of the Industrial Development Authority, who added that although some sectors, including exports, will be negatively affected, panicking is the last thing one should do. He also underlined that Egypt will continue to be a strong investor- attractive destination. This Tuesday, East of Port Said industrial zone, an area through which 40 per cent of the world's trade volume passes, opened for a third phase of investment bids to complete the construction of a fully equipped industrial zone. "In the meantime, we need to attract some LE66 billion worth of investments in the food processing industries. Moreover, studies to establish industrial logistics zones in strategic areas along the country are about to be completed," said Assal who added that LE502 million were spent last year to extend infrastructure facilities to 22 industrial zones in 18 Egyptian governorates. Nonetheless, Assal believes that there are "many pitfalls that need to be revisited to save money and to better manage our resources." He argues that the government should not submit to demands by factories in the free zones to buy energy at a subsidized rate. He cited the example of freezone-based cement, saying that their profits exceed 100 per cent, wanting to know why they should enjoy subsidised energy. "This only means that the country has been wasting a resource by selling it at a marginal price," he said.
