Manufacturing a priority as country aims for sustainable growth

Economy

Published: 03 Mar. 2019, 18:22

Manufacturing a priority as country aims for sustainable growth

Left: From right, Sahar Nasr, Minister of Investment and International Cooperation, Mohamed Ahmed Maait, Minister of Finance, and Mohab Mohamed Hussein Mamish, chairman of the Suez Canal Economic Zone, speaking with Korean Prime Minister Lee Nak-yon in Seoul Tuesday and discussing economic cooperation and hydrogen cars, which the Korean government has been promoting. Right: Sahar Nasr, Minister of Investment and International Cooperation. [PARK SANG-MOON, YONHAP]

What sort of companies have you been seeing and what’s the response?

We are giving priority to sectors that create jobs because our main objective is inclusive and sustainable growth. We are targeting sectors that will bring value added, technology and management skills.

We are targeting sectors that not are necessarily import substitution, but sectors where we can create exports.

I don’t want to say “gateway to Africa,” but effectively with the Suez Canal we are the key channel for a lot of commerce between Asia and Africa, and also Europe. We’re trying to reposition Egypt in general in the world in terms of being a hub for investment.

I’m providing a lot of incentives in terms of taxes in specific regions, such as in the Suez Canal Economic Zone, where we want a huge industrial cluster, and Upper Egypt, where I want to create jobs. I want to diversify the economy so it is not dependent on tourism.

Industry is my No. 1 target.

Egypt has been doing a great job in energy, which kept coming up during my meetings. Whether it’s gas, petroleum or electricity. And we’ve been doing renewables; we have the largest solar plant in the world. That’s a sector where there’s already a lot of interest. That’s why I’m not putting it as a priority because it’s already well positioned and already doing great. It’s not currently my target.

The priority area is industry.

We are very interested in manufacturing. We’re reaching out to Korean companies but also to German and other European companies, and those from Asia. We’re also discussing component manufacturing, because in Egypt we have a huge advantage in terms of skilled workers.

We wanted to ensure we’re repositioning Egypt, and we’re providing all the guarantees and assurance. We amended the financial listing law, amended the mortgage finance law so it is more inclusive, amended the capital market law and introduced for the first time a bankruptcy law.

Egypt is a gateway to a larger market.

In the meeting with the Prime Minister [Lee], we were referring to Egypt with a hundred million people, but with a free-trade agreement in Africa, it is a 1.2 billion market. This is the size of the market we’re talking about.

So we’re into industries, energy, agribusiness, consumer goods, manufacturing, electronics and textiles. Because Egypt is rich in cotton, we have a competitive advantage in textiles.

What are some of their concerns of and questions from companies?

I remember during my first visit with LG and Samsung, their main concern was access to foreign currency and sending profits back home. This time, these were completely out. I didn’t hear those concerns. They weren’t even in the top 10 list.

I can see a major change, frankly speaking.

This time, they had specific questions on the investment law. They are now interested in the investment map to see the locations and the advantages of other areas in Egypt versus the economic zone. They are going deeper into where they can start their businesses.

They are interested in what packages - tax incentives and non-tax incentives - we can offer.

Human rights, reform and foreign investment, what’s the balance now?

Egyptians have a lot of freedom of speech and a lot of rights. The parliament is very outspoken. By law, we now have equal access that we didn’t have in the past in terms of access to finance, in terms of access to becoming an entrepreneur.

In terms of freedom of speech, I see there’s a lot of freedom of speech: that’s the reality. In fact we are very tolerant, and we are very receptive to different points of view.

I think there’s a misperception.

But we have to clarify. We have to work on the misperception and reach out. Different beliefs and different principles don’t mean I am better than you or that you’re better than me.

It’s just that we’re different.

BY RICHARD MEYER AND LEE HO-JEONG [lee.hojeong@joongang.co.kr]