CAIRO: Egypt and the US are looking to enhance cooperation in non-bank financial services, representatives of both governments said this week. Minister of Investment Mahmoud Mohieldin and US Ambassador Margaret Scobey met last week to discuss strategies for enhancing investment cooperation between the two countries. US embassy senior officers, along with USAID and Ministry of Investment officials were also present at the meeting, which focused on opportunities for partnership in non-bank financial services and new investment in external trade promotion projects. Currently, the majority of US foreign direct investment (FDI) in Egypt is concentrated in the oil and gas exploration and petroleum service industries as well as manufacturing enterprises. "The United States is keen on developing economic relations with Egypt. The coming period will witness more cooperation in education, science and technology, as well as enhanced support for private project initiatives, Scobey said. The US and Egypt have a strong history of economic cooperation dating from the beginning of Egypt's Open Door Policy and the Camp David Accords in the 1970s. Since that period, the United States has been Egypt's single largest foreign investment partner. The United States contributed 36.1 percent of FDI in Egypt in fiscal year 2007/2008, topping the list of countries investing in Egypt. The US is also currently the largest investor in petroleum and the second largest non-petroleum, non-Arab direct investor in the country. Last week's meeting reflected a growing desire on the part of the United States to take advantage of favorable investment opportunities in Egypt during a time when many international companies are seeing promise in the local market. According to a World Investment Report published in 2008 by the United Nations Conference on Trade and Development (UNCTAD), Egypt was ranked first in North Africa and second in the African continent in attracting FDI. Ministry of Investment statistics show that net FDI inflows increased from $509.4 million in fiscal year 2000/2001, to $11.1 billion in 2006/2007 and $13.2 billion in 2007/2008. In 2007/2008 net FDI inflows as a percent of GDP stood at 8.5 percent, up from 5.7 percent two years earlier. Minister Mohieldin pointed out that Egypt's ongoing program of economic reforms has contributed to healthy growth rates and strong liquidity in the country's economy in spite of the economic crisis. "The first phase of the financial sector reform program, which extended from 2005 to 2008, has enabled the Egyptian financial sector to avoid the repercussions of the global crisis, he said. The minister emphasized the role of diversification, increased investment and heightened interest in tapping into local demand in promoting growth in the local economy. Mohieldin emphasized that the Egyptian government plans to continue implementing structural reforms to ensure sustainability of economic growth and development in a second phase of reforms to take place through 2012. These reforms will focus on fine-tuning the state's role in supervision, increasing market efficiency and improving disclosure quality in financial institutions. The newly established General Authority for Financial Supervision, which began operations this month, is the first step in improving Egypt's investment environment, the minister said during talks. The authority will be responsible for promoting a healthy financial culture, ensuring correct implementation of supervision standards, overseeing insurance issuance, and monitoring capital markets and the mortgage finance sector. Further talks between US government officials and the Egyptian Ministers of Trade and Industry and Finance will take place in the coming months to structure and implement plans to enhance economic cooperation.
