Mapping approach

Main strengths and opportunities

- Egypt has an abundant, competitive labour force.
- It has diversified sources of income: fees from the Suez Canal, tourism, private transfers, and remittances, gas and oil exports.
- Foreign-exchange reserves are at a comfortable level and foreign debt remains moderate.
- The country’s strategic location as a gateway to Africa and the Middle East and as a regional mediator ensures the political and financial support of Western countries.
- Structural reforms have been introduced aiming in particular at streamlining bureaucratic procedures for investments and tackling impediments to higher growth, promoting the privatisation programme, improving the business climate, and introducing numerous investment incentives targeting upgrading of the business environment and modernisation of the economy.
- New natural gas reserves were recently discovered in the Mediterranean and this resource could become the “engine” of the hydrocarbons sector in the next ten years. In 2003, Egypt started to export its gas to Jordan through an underwater gas pipeline connecting Taba to the Jordanian port of Aqaba.
- Egypt has remained an important recipient of foreign direct investment (FDI) in the last decade, with annual inflows of $1 billion (1 percent of GDP). However, after a significant drop in investments during the period of crisis, new records were posted in 2004-2005 ($2.134 billion) and 2006 is promising, with $2.554 billion already declared over the first quarter (according to Central Bank of Egypt statistics). FDI can be either direct or through joint ventures, in the oil sector, cement industry, pharmaceuticals, automotive engineering but also tourism (management contracts) and telecommunications.
- The country’s international profile has improved thanks to legislation encouraging foreign investments, the possibility of repatriating invested capital and profits, tariff cuts, corporate tax reform, promotion of exports, creation of special economic free trade zones and protection of intellectual property. It is hoped that further privatisation will lead to a further increase in foreign investment in Egypt.

Wednesday 7 February 2007, by AFII - ANIMA

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