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Be Ready for the Future with
Vodafone Ready Business Vodafone Enterprise preps companies for the future As local companies face stiffer competition from international companies at home and abroad, they need to constantly upgrade their technology and communication infrastructure to help them market, sell and deliver their products and services quickly and effortlessly to their clients. Accordingly, Mohamed Abdallah, Enterprise Director at Vodafone Egypt, and his team have been on the cutting edge when it comes to offering telecom services as they leverage local expertise to customize these solutions using the best practices and lessons learned from the Vodafone Group.
What is the role of the Enterprise department in Vodafone Egypt? MA: The department is responsible for developing services for enterprises in Egypt, from small size companies up to large multinational firms. Our objective is to develop products and services that help companies use different telecom services that allow them to grow and develop. Currently we are serving around 70 percent of the companies in the market, whether small or large.
What is your portfolio of services? MA: We provide fixed connection services as well as mobile services. And because there is no one-size-fitsall service, even at the most basic level, we customize our solutions to each client’s needs. Our services vary greatly. Fixed connection services, for example, can be a basic ADSL, landline internet connection service used in a small shop that manages a single surveillance camera connected to the internet—an IP CAM. Meanwhile, a large company will need a virtual private network (VPN) with security services and faster connection, such as in hotels that need Wi-Fi for staff and guests as well as receive multiple feeds from cameras across the premises. These feedbacks can be received on a PC or mobile device.
Mohamed Abdallah, Enterprise Director at Vodafone Egypt
For companies with foreign operations, VPN and international connectivity are leveraged by the network established across the Vodafone Group. This network can connect a local company to their international branches, headquarters or clients. This will not only benefit large companies and multinationals, but also benefit small Egyptian companies who serve international clients. For basic mobile telephony services, we can provide solutions whereby employees have a short code to communicate with each other under a different rate. The same applies to data bundles. We can also provide data-only SIM cards which communicate information among different machines in a production line for example.
What is the Vodafone Ready Business service?
How does 4G technology benefit enterprises? And how do you leverage it?
MA: The Ready Business platform was developed by Vodafone Group to help companies develop as they face the challenge of rapidly changing connectivity solutions. Companies used to compete with local companies only, so they didn’t need advanced telecom services. But now, with the aid of advanced communication technologies, they also compete with foreign firms at home and abroad. Hence, their telecom infrastructure needs to allow them to compete on a global scale as well as be easily upgradable to meet future tech advancements. This tool was developed based on research and analysis of every major industry in various markets. We identified the services that the most successful businesses have, and used this information to develop the Ready Business Meter which is a free online assessment tool to measure the readiness of a company’s telecom infrastructure. Companies can log onto the Vodafone website, answer a questionnaire, and from it know how their telecom and technology infrastructures compares to their competitors. It tells them what kind of technology, connectivity, security and cloud services they need to be 100 percent integrated in the digital world. We have a very good turnover when it comes to companies ending up wanting our enterprise services after taking the ReadyBusiness test. It’s around 60 percent, which for us is very good. Of course, large companies need workshops in addition to the assessment.
MA: The introduction of 4G to Egypt, from the point of view of Vodafone Egypt, is an evolution of what we have been providing to the market since we introduced 3G technology. We are lucky because we have 20 Vodafone operators around the world who have already introduced 4G in their respective markets, so we have learned a lot about their success and downfalls. The core benefit of 4G services is added speed. In the enterprise sector, this added speed opens up a different world of opportunities. The introduction of the internet of things, where machines automatically send information via the internet, will greatly benefit from 4G. For example, an FMCG company can connect their storage facilities with 4G data SIM cards to send data in real time about the temperature of the fridges or the stock left. Also, a 4G data SIM card can transmit, in real time, data from heart monitoring devices to the doctor, nurse or ambulance. However, I need to note that 4G is not a substitute for existing technologies. Think of 4G in the same way as you thought of 3G when it was first launched; it introduced a whole new dimension to how we use technology and the services we get. Look at mobile data. There are three to four times as many users of mobile data as there are people using fixed-line internet—this was made possible by 3G. This is a global trend. Introducing 4G will change these dynamics and introduce new trends that will increase mobility. On the level of enterprise services, 4G is an enabler for companies to reach their objectives. Regarding full-scale rollout of 4G services, our infrastructure is 100 percent ready. We spent LE 9 billion over the past two years to be ready. What we are pending is final approvals from the NTRA and Minister of ICT. If they say launch tomorrow, we will launch tomorrow.
What is your primary focus going forward? MA: We are focusing now on developing solutions for SMEs and Small Office/Home Office (SOHO) because we believe that they are the vehicle for economic growth in Egypt. There has been huge growth in entrepreneurship recently, fueled by the government’s focus on growing this sector. Accordingly, we identified some common needs of these companies and launched Ready Business Packs services on the same platform as the Ready Business service. It is a simplified version of the latter, designed to help SMEs and SOHOs attain basic connectivity. There are three Packs: Ready Connectivity, where the pack has basic mobile and fixed line connectivity with basic mobile data connectivity. Ready Security adds IP CAM control and video feed as well as SMS notifications in case of emergencies. There is also an Advertising Pack that helps companies bypass the cluttered advertising space by allowing SMEs to advertise via SMS.
How much are enterprises services expected to grow in the near future? MA: The telecom sector has been growing at a decent pace over the past few years. The enterprise service sector, meanwhile, has been growing faster than the overall sector. This growth is fueled by companies that are looking to grow on the global scene and realize that they need to use advanced communication tools to help them with that. The appetite is huge. We are expecting that the sector will grow by 10 to 12 percent annually over three years.
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DECEMBER 2016 VOLUME 33
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ISSUE 12
Cover Stor y The road less traveled In one of the world’s most congested cities, startups help fill the transportation gap.
Cover Design: Nessim N. Hanna
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Inside 20
Editor’s Note
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Viewpoint
The Newsroom 24
In Brief The news in a nutshell
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Region Notes News from around the region
© Copyright Business Monthly 2016. All rights reserved. No part of this magazine may be reproduced without the prior written consent of the editor. The opinions expressed in Business Monthly do not necessarily reflect the views of the American Chamber of Commerce in Egypt.
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Business Monthly – December 2016
DECEMBER 2016 VOLUME 33
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Market Watch 44
Stock Analysis Free at last
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Capital Markets A glance at stocks and bonds
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Money & Banking Forex and deposits
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Key Indicators The economy at a glance
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Egypt-U.S. Trade Imports and exports
In Depth 30
Egypt looks to China A currency swap points to stronger ties with the East
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Arab financial institutions replace Europeans Oil-rich Gulfies are buying up local banks
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Business Monthly – December 2016
ISSUE 12
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Executive Life 52
Dining Out A passage to India on the Nile
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Coworking Hot desking
The Chamber
Corporate Clinic
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Events
Distance learning The struggle to educate refugees
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Member News
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New Members
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Classifieds
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Media Lite An irreverent glance at the press
Editor’s Note
ALL THE RAGE
Director of Publications & Research Khaled F. Sewelam Editor-in-Chief Rachel Scheier
T
here is a famous scene from “Office Space,” the 1999 cult comedy about the inanity of the modern workplace, in which three nerdy guys in corporate attire take a baseball bat to a printer. But these days, in the current climate of universal anger—their destructive display to protest their slavery to technology and the universal profit incentive feels almost quaint. In 2016, we saw pent up anger boil over in all kinds of ways, through terrorism and cyberwar, violent insurgencies and electoral upsets. The message of Brexit in the UK and the outcome of the U.S. presidential election was about the resentment the disgruntled majority feels toward what it perceives as a rootless elite. This was the year that internet trolling and hatemongering against immigrants and minorities went mainstream, and so-called anger rooms—where people pay to smash things a la “Office Space”—popped up in places from Houston to Australia. It’s hard to remember when the world last experienced a moment of such “universal irritability of everybody against everybody else,” as Hannah Arendt wrote. Maybe it’s not a coincidence that my 9-year-old son has become obsessed with gangsta rap. Many point to yawning global inequality as a main cause of this anger disorder. In an era when capitalism and democracy was supposed to lead to universal prosperity, half the world’s wealth is now owned by the richest 1 percent of the population. On the other hand, the hero for these angry, poor white American masses is a billionaire. But, as anyone who’s ever argued over a parking space or gotten into a fight on a playground knows, anger is not rational. The “primitive, savage and evil impulses of mankind have not vanished in any individual,” warned Sigmund Freud in 1915. Those of us who are prone to flying off the proverbial handle know all too well the poisonous effects of rage, which is why we teach our kids to “count to 10” before giving in to animalistic instincts that tend to prevent dialogue and mutual understanding. Still, there are times when anger—whether it’s inspired by outrage at a societal wrong or simply the need to, finally, stand up for oneself—serves a purpose, however explosive the consequences. How much would legendary pacifists like Nelson Mandela or Martin Luther King have accomplished without the fury of their followers? And in all kinds of societies, sometimes the one thing that checks the powerful is the fear of collective wrath. Sometimes, the only means of control we have left is that firm voice in our heads that says, “No.”
Contributing Editors Kate Durham Tamer Hafez Staff Writer Edmund Bower Contributing Writer Amy Cass Senior Art Director Nessim N. Hanna Graphic Designer Emy Emile Advertising & Business Development Director Amany Kassem Advertising Coordinator Nada Auf Photographers Kareem E lSharnoby Said Abdelmessih Production Supervisor Hany Elias Market Watch Analyst Amr Hussein Elalfy Chamber News Contacts Nada Abdalla, Azza Sherif, Susanne Winkler
R ACHEL S CHEIER
U.S. address: 1615 H Street, NW • Washington, D.C. 20062 Please forward your comments or suggestions to the Egypt editorial office:
Business Monthly
American Chamber of Commerce in Egypt 33 Soliman Abaza Street, Dokki 12311 • Cairo • Egypt Tel: (20-2) 3338-1050 • Fax: (20-2) 3338-0850 E-mail: publications@amcham.org.eg www.amcham.org.eg/bmonthly CTP and printing: Sahara Printing Company, SAE – Nasr City Free Zone
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Business Monthly – December 2016
Viewpoint
A BEAUTIFUL PERSON
A
few years back, Nevine Loutfy was an elegant acquaintance I had met briefly at social functions, and I did not realize the depth of the exceptional treasure behind that strong professional façade. Luckily, she decided to join our Doorknock trips to Washington, D.C. Then we struck oil when she joined the AmCham board in the spring of 2013. Doorknocks are an amazing bonding venue. Spending a week with people who are driven by the same causes and sharing the same values reveals characters and creates longlasting friendships that would never happen in the daily routines of busy executives. Having only seen the successful banker side of that great lady, our consecutive teams quickly discovered that this highly sophisticated person was also a witty, generous human being, who, besides being tough when she had to, knew how to master the ideal management balance. Her subordinates loved her and feared her equally. Our fellow board members got to know that when you wanted to have something done efficiently and in-depth, Nevine was the safest bet. This amazing person who has worked in many countries always remained a staunch patriot. She came back to Egypt and managed to turn around the bank known as ADIB—Abu Dhabi Islamic Bank. Today this institution is profitable, branded and its headquarters and branches are exemplary. In her job, on social media and on the AmCham board, Nevine rejected violence and fanaticism with passion, reflecting a deep appreciation for human life, privacy and tolerance.
On Nov. 22, Cairo woke up to drastic news: Nevine had been savagely murdered in her home a few hours earlier! The AmCham staff and board, the business community and the banking sector were all in a state of shock, let alone her two sons, her father, her family and other loved ones, who could not believe that this beautiful person is no longer with us because a worthless drug addict committed a horrific crime. The world is facing two major threats, terrorism and drugs; both thrive on the destruction of brains and the dismantling of all human feelings. Understanding, compassion, conscience and certainly respect of human lives become alien concepts for terrorists and addicts. Because of fear and resentment of the current state of affairs, we are witnessing the rise of rebellious feelings around the globe, which are understandable and, to a certain extent, justified, however dangerous. Past generations had started to build social bridges, looking for points of convergence and acceptance of differences. Unfortunately, today we seem to be drifting toward divisive attitudes that will take humanity backwards as they fuel hatred and aggression. As we remember Nevine Loutfy and pray for her, her family and her friends, we must follow in her footsteps by actively advocating for peace, tolerance and respect of differences. People are, will and must remain different, the common denominator of all is around us, provided we denounce ugliness and embrace civility and respect. We will all miss and honor this wonderful person who embodied peace and was lost too soon. A NIS A. A CLIMANDOS
President, AmCham Egypt
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Certainly
CBE allows the pound to float freely
After months of speculation, the Central Bank announced Nov. 3 “its decision to move, with immediate effect, to a liberalized exchange-rate regime. After holding the value of the pound at LE 8.78 to the U.S. dollar since March, the CBE set an initial price of LE 13 per dollar “to serve as soft guidance to jumpstart the market,” before allowing banks to trade freely. The currency quickly sunk to around LE 16 per dollar—losing nearly half its official value but strengthening compared to black market prices that had bottomed out at more than LE 18 per dollar the previous week. The discrepancy between official- and parallel-market rates had worsened a shortage of hard currency that was also due in part to the Bank’s attempts to keep the pound pegged to the dollar, as well as a host of restrictions aimed at preventing businesses from turning to the black market for dollars. Analysts roundly hailed the float as a long overdue corrective measure and a key step toward attracting capital and implementing much-needed fiscal and monetary reforms. However, businesses with open lines of dollar-denominated credit were hit hard by the pound’s sudden drop, and price hikes of inputs as well as consumer goods were expected to bite hard at a time when many Egyptians are already having trouble making ends meet.
IMF approves $12-billion loan for Egypt
Three and a half months after the formal announcement of negotiations between Egypt and the International Monetary Fund for a $12 billion loan, the IMF executive board approved the deal Nov. 11. The decision cleared the way for immediate disbursement of around $2.5 billion, with additional tranches to be phased in throughout the three-year program. “The Egyptian authorities have developed a homegrown economic program, which will be supported under the IMF’s Extended Fund Facility, to address longstanding challenges in the Egyptian economy. These include: a balance of payments problem manifest-
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Business Monthly – December 2016
ed in an overvalued exchange rate, and foreign exchange shortages; large budget deficits that led to rising public debt; and low growth with high unemployment,” said IMF Managing Director Christine Lagarde in a statement. Lagarde pointed to reforms already made by Egypt, such as liberalizing the exchange rate and introducing a valueadded tax, while noting that additional measures were still needed to address “structural impediments to growth and job creation and create an enabling environment for private sector development.” Overall, the loan aims to reduce the country’s public-debt-to-GDP ratio by 10 percentage points and redirect some government savings toward vulnerable groups.
Egypt’s credit outlook up on IMF deal, currency float
All three major credit ratings agencies viewed last month’s currency float and IMF loan as good for Egypt. In a Nov. 7 statement, Moody’s said the liberalization of the exchange rate was a credit positive for Egyptian banks, because it should increase the availability of dollars and stimulate economic activity. Fitch echoed this assessment in a Nov. 9 statement that also noted the “social and political risks in an already challenging policy environment.” On Nov. 11—shortly before the approval of the IMF deal was announced but after a statement from the IMF's Lagarde
In Brief
endorsing the agreement—S&P bumped up Egypt’s sovereign credit outlook to “stable” from “negative,” retaining its B- rating.
Foreign bond investment returns
After shying away for years due to political instability and a dual exchange rate, foreign portfolio investors began making a cautious reentry into Egypt’s bond market. Among the firms lured in by short-term returns of as much as 19 percent—and reassured by a deal with the IMF—was London-based hedge fund GAM UK Ltd., reported Bloomberg, adding that other hedge funds were poised to follow. U.S.-based Citigroup also began selling notes tied to Egypt’s sovereign debt last month, the first time it has done so in six years. “Investors view Egypt as an upside story,” a Citi official told Bloomberg. In a phone interview, Finance minister Amr El-Garhy told Bloomberg that he expects to see $8 billion to $10 billion in foreign inflows via t-bills, t-bonds and stocks in the next three to six months. Meanwhile, Egypt’s stock market soared in the wake of the IMF deal, despite an overall downturn in emerging market stocks following Donald Trump’s victory in the U.S. presidential election.
Fuel prices shoot up
Effective as of 12:01 a.m. on Nov. 4, the day after the float of the Egyptian pound, the prices of subsidized fuel increased by 30 to 47 percent. Prices rose across the board, ranging from LE 2.35 per liter of 80 octane gasoline (up by 46.8 percent from LE 1.60) to LE 3.50 per liter for 90 octane (up 34.6 percent from LE 2.60 per liter). Diesel, compressed natural gas, kerosene and other fuels were also affected. Subsidy reforms were a key condition of Egypt’s agreement with the IMF, but officials stressed that the state is still subsidizing petroleum products: Because the drop in the pound’s official value
exceeds the fuel-price hikes, Egypt’s pound-denominated fuel subsidy bill will almost certainly increase in the wake of the currency float.
Officials raise interest rates
In the same Nov. 3 press release in which it announced the currency float, the CBE raised key policy rates by 300 basis points, pushing overnight deposit and lending rates to 14.75 percent and 15.75 percent, respectively. Noting that annual headline inflation reached 13.56 percent in October, the bank wrote that “Ensuring price stability over the medium term remains the main objective of the CBE.” Following a Nov. 17 meeting, the Bank’s Monetary Policy Committee opted to hold these rates steady, anticipating that annual inflation will be impacted by “transitory cost-push factors stemming from the economic reform measures before beginning to narrow,” but predicting that these factors would be partially offset by suppressed demand combined with liberalization of the currency and other reforms.
Egypt looks for new oil suppliers
Egypt was forced to scramble after Saudi Arabia, one of its most reliable, longtime financial backers, suspended oil shipments “until further notice,” as officials from the Egyptian Ministry of Petroleum confirmed to Reuters last month. The fuel, part of a $23-billion aid package promised by Saudi Arabia, stopped coming in October. During an April visit, Saudi officials had agreed to provide Egypt with 700,000 tonnes of refined oil products monthly. But since then, the relationship between the two countries has hit several rough spots, with protests and a court verdict forbidding the transfer of two Red Sea islands from Egypt to Saudi Arabia and Egypt’s endorsement of a Russian-backed draft United Nations Security Council resolution on Syria that Saudi Arabia opposed. Some of the shortfall will be made up
Business Monthly – December 2016
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In Brief
ST RE E T SE N SE What’s your daily commute like? I use my car to go everywhere. It’s the best way to get from my home in central Cairo to the 6 October City industrial district, where I work. It usually takes me around an hour and half in the morning and almost two hours on the way home because of traffic. It’s exhausting for sure, but I can live with it. Put on the A/C, some nice music and relax—it’s the only way to survive my commute. The only time I don’t drive is when I go downtown to Tahrir Square or Ramses, where there’s no parking; then I take the Metro, because I don’t want the police to tow my car. Gamal Taher, 39, accountant
The main part of my journey is on the Metro. But I have to walk quite a bit to get to the nearest station. My commute takes around 30 minutes from my home in Dar el Salaam to my job in Tahrir Square. I have a car, but if I drove, my commute would take twice as long, so I only use it on weekends. The main drawback is that in the summer, I have to carry a big bag of spare clothes because I usually arrive to work sweaty. Hassan Saleh, 29, fast-food restaurant manager I mainly take the microbus. My commute from Sayeda Zeinab to the Zamalek hotel where I work normally takes me anywhere between 30 minutes and an hour, depending on traffic. It is very uncomfortable to sit in those things, and I’ve been harassed a few times. Needless to say, I fear for my life every time I get in one because the drivers are all maniacs. But it’s what I can afford. Lamia Fahmy, 25, maid Thankfully, my university provides a shuttle bus. I drive the short distance from my house to the pickup points in Sheikh Zayed, and then the bus ride to New Cairo takes a little over an hour in the morning and more than an hour and a half in the afternoon. I use the time to catch up on sleep or browse the internet. The terrible thing is when I have to stay late at school or go home early. Then I have to use my car. I really dread those days. Zeinab el Sawaf, 19, student I ride my bicycle to work, unless I have a meeting—then I use my scooter. I live in Zamalek and work at the Nile Towers, so it’s really convenient, it usually takes 30 minutes at most. It’s a major reason why I stay with this company. I carry work clothes with me and change when I arrive. Sometimes, if I have meetings in Heliopolis or New Cairo, I take my scooter. Baher Saad, 45, sales rep
COMPILED BY TAMER HAFEZ
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I use almost every imaginable mode of public transport. I live in Nahia and work at a bake shop at a mall in Sheikh Zayed. I take one of the seven-passenger nahla-busses (which only run in Sheikh Zayed) to the Hyper One mall. Then I take a microbus to the edge of Nahia, where I catch another, smaller microbus to the far edge of the neighborhood, where I take a tuk-tuk. It takes me roughly an hour to 75 minutes, depending on how much time I have to wait for the buses. Unfortunately, this is the only way for me to get home; I can’t afford to take taxis or own a car. Yassin Abdel Gawad, 45, baker
RUSSIA REFUSED TO LIFT A BAN ON FLIGHTS TO EGYPT THAT HAS CRIPPLED TOURISM.
by Kuwait, which agreed in midNovember to extend a 2014 deal to provide Egypt with two million barrels of crude oil and 1.2 million tonnes of other petroleum products per month at global market prices. Early last month, reports circulated that Egypt’s oil minister was talking to Iran, but both nations have denied the rumor.
BP buys stake in Shorouk Concession
A second player is getting in on the action at the “supergiant” offshore gas field that was discovered by Italian energy firm Eni in August 2015. On Nov. 25, Eni announced it sold UKbased BP a 10-percent stake in its Shorouk concession, where the Zohr gas field is located. BP paid $375 million for the stake; it plans to reimburse Eni for its share of the roughly $150 million the Italian company has already spent operating the field. BP also retains the right to purchase an additional 5 percent under the same terms. “This interest in a truly world-scale asset will complement our existing Egyptian business,” said Bob Dudley, BP’s chief executive, in a statement. Eni, meanwhile, noted that the deal is in line with its
Business Monthly – December 2016
“dual exploration model,” which seeks early monetization of discoveries. BP said it anticipates that the sale will get the necessary approvals from Egyptian authorities by the second quarter of 2017. The Zohr field, the largest natural gas field ever found in the Mediterranean, is expected to start delivering fuel to market by the end of next year.
No change on Russian flight ban
Despite what it deemed “sizable progress in complying with Russia’s aviation safety requirements,” Russia’s transport ministry declined to lift a ban on flights to Egypt as of press time. Russian inspectors had another visit planned before the end of November, but even a positive outcome would likely be too late for Red Sea resorts to secure Russian bookings in time for the winter high season. Tourist arrivals for the first three quarters of 2016 were down by more than a third year-onyear, according to state statistics agency CAPMAS, largely due to the absence of Russian tourists as well as fewer visitors from the UK, Germany and Italy.
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Region Notes Caspian Sea
Black Sea
TURKEY
TUNISIA
MOROCCO
Mediterranean Sea
CYPRUS LEBANON
SYRIA
IRAN
IRAQ
ISRAEL JORDAN LEBANON
ALGERIA LIBYA
SYRIA
KUWAIT PALESTINIAN TERRITORIES
ISRAEL EGYPT JORDAN
Persian Gulf
BAHRAIN QATAR
UAE
SAUDI ARABIA
OMAN
Red Sea SUDAN
YEMEN
Arabian Sea
SOUTH SUDAN SUDAN
Map intended for illustrative purposes only and may not accurately depict national boundaries or disputed territories.
Atlantic Ocean
Fuel price hikes prompt calls for a strike in Sudan After the government liberalized petrol and diesel prices and upped electricity tariffs, opposition forces in Sudan called for a three-day strike from Nov. 27-29. Scattered protests also took place within days of the Nov. 3 announcement, which saw the cost of fuel rise by 30 percent and electricity prices go up by 50 percent for many households. Minister of Finance Badr el-Din Mahmoud reportedly said that the measures were part of a reform program that would lower government expenditures and save hard currency reserves in the face of a falling Sudanese pound. While some activists say the strike was a success, government officials claim it failed, seizing the entire print run of the independent local newspapers reporting on the strike. A private television channel was also ordered off the air. International media reported that the streets of Khartoum were virtually deserted on the morning of Nov. 27. In 2013, mass protests against price increases were suppressed with deadly force.
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Turkey raises interest rates Citing the need to tighten monetary policy in the face of a rapidly depreciating currency, Turkey’s central bank raised benchmark interest rates for the first time since January 2014. Despite repeated calls from President Recep Tayyip Erdogan to boost the economy by keeping credit cheap, the bank increased its oneweek repo rate by 50 basis points to 8 percent and its overnight lending rates by 25 basis points, bringing it to 8.5 percent. The Nov. 24 rate hike briefly boosted the lira, but it quickly slumped to a record low against the dollar.
IMF urges more reforms for Kuwait After posting its first budget shortfall in 16 years thanks to low oil prices last fiscal year, Kuwait enacted a series of austerity measures that raised the price of fuel, electricity and water. The reforms—particularly a recent hike in gasoline prices—were
Business Monthly – December 2016
so politically sensitive that they Ocean prompted theIndian dissolution of parliament and calls for a snap election. Still, the Gulf state needs to go much further, said the International Monetary Fund last month. Assuming oil prices gradually recover to $60 per barrel by 2021, Kuwait will need around KD 35 billion ($115 billion) to finance its budget deficit over the next six years, the IMF said in a Nov. 15 statement. So far, the gap has been paid for via Kuwait’s General Reserve Fund and the sale of domestic bonds, although the country has announced plans to tap international capital markets in the near future. “A gradual but sustained fiscal effort is needed to reduce vulnerabilities and bring government savings closer to levels consistent with intergenerational equity,” said the IMF, calling for further subsidy cuts, tax increases and greater efforts to control the publicsector wage bill and boost the non-oil private sector.
BUSINESS MONTHLY ARCHIVES
THE FOREX CRISIS
EGYPT LOOKS TO CHINA FOR DOLLARS BY TAMER HAFEZ
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rom the shelves of familyowned, neighborhood storefronts and the tables of Cairo’s sidewalk vendors to the Metro cars where roaming salespeople ply their wares, the “Made in China” label is as ubiquitous in the Egyptian capital as traffic and steaming cups of tea. But as the U.S. dollar, the standard global currency, has become harder for traders to get their hands on, imports of all kinds have been affected. When they are able to secure dollars,
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importers have to roll the dice and hope that they don’t lose too much as a result of buying and selling in three different currencies. “We are never really sure how much yuan we will end up with when we arrive,” says Ahmed Fahmy, who sells affordable Chinesemade men’s suits at a downtown shop. In the past 18 months, Fahmy estimates that he’s lost LE 50,000 thanks to the volatile exchange rates. Two pieces of recent news could reduce the number of times traders like him have to change currencies as well
as bolstering Egypt’s economic ties with China. On Oct. 1, the International Monetary Fund added the Chinese yuan to its basket of reserve currencies known as Special Drawing Rights, or SDRs, an imaginary currency that tracks the value of a handful of global currencies including the U.S. dollar, the euro, the Japanese yen and the British pound. While analysts noted that the move is largely symbolic, it recognizes China’s growing importance in the world economy and the Asian giant’s recent efforts to “internationalize” the renminbi, or
In Depth
“the people’s currency,” as it’s officially called. A few weeks later, an unnamed official at the Central Bank of Egypt told Bloomberg that Chinese authorities were reviewing a $2.7 billion currencyswap deal between Egypt and China. Under such a swap, say analysts, the CBE would furnish Egyptian banks with yuan to pay for imports from China, one of Egypt’s biggest trade partners. It would amount to “an extra tool to stabilize the current high USD demand, in addition to more FX liquidity at a reasonable cost,” wrote Pharos Holding in a recent note to clients. Furthermore, International Cooperation Minister Sahar Nasr also told the state-run MENA news agency that Egypt is in talks with China about a $4-billion loan, $1 billion of which would be used to support foreign reserves, with $3 billion allocated to development. Deputy Finance Minister for the Treasury Mohamed Meait said Egypt would begin negotiating a $2-billion loan from China in November. Egypt, with its enormous population of low-income city dwellers, has become an increasingly lucrative destination for cheap, Chinese-made goods, despite sporadic efforts by the government to crack down on smuggled, lowquality imports. The flood of Asian knick-knacks has persisted despite protectionist measures meant to support local industry. In 2015, then trade minister Mounir Fakhry Abdel Nour announced a ban on Chinese-made Ramadan lanterns, plastic sphinxes and other Egypt-themed souvenirs, though there is no evidence that the decree was ever enforced. Analysts believe a currency swap with China could boost trade and investment from the Asian giant, which is already among Egypt’s biggest trade partners. In fiscal 2015/16, trade with China totaled $5.19 billion, according to the CBE. The balance is skewed dramatically in China’s favor, with Egypt importing $4.73 billion worth of Chinese-made electronics, clothing, automobiles, toys and other goods during the last financial year while exporting just $460 million worth of crude oil and gas, marble and granite, lubricant,
oranges and raw iron to China. And those figures don’t take into account the massive amount of Chinese-made goods that are smuggled into Egypt. Currency swaps are often used to hedge against dramatic currency fluctuations and by countries with liquidity problems. The proposed swap would enable local importers of Chinese products to access yuans directly, without buying dollars—which have tripled in price over the last five years on the black market, which, until early last month, was the only option for the vast majority of Egyptian businesses and traders needing hard currency. At the beginning of the swap, the CBE buys a certain amount of yuan with Egyptian pounds at the going market exchange rate and vice versa. At the end of a fixed term, the two countries pay each other back, with interest. In the meantime, the money can be used for trade, investment or to fortify Egypt’s foreign reserves, but it cannot be converted into another currency. The swap has the potential to benefit both countries, say analysts. “For China, providing trading partners with yuan currency swaps has been another move on the road to expand, albeit gradually, the use of the renminbi on the international arena,” wrote Pharos in its research note. “For Egypt, it marks an opportunity to support the CBE’s FCY reserves whilst slightly ease local demand for the USD.” It concluded: “We believe that acquiring a yuan currency swap provides the CBE with an extra tool to stabilize the current high USD demand, in addition to more FX liquidity at a reasonable cost.” It also makes sense from a longerterm perspective for Egypt to bolster its economic ties with China. As the Asian nation has grown into a global manufacturing powerhouse, the world’s biggest exporter, its currency—which the government has traditionally kept tightly controlled—has remained largely local, little used for international trade. Now that is changing, however; analysts agree that joining the basket of SDR currencies illustrates the renminbi’s growing stature as a global currency, as more nations are using yuans.
Recent data from the Society for Worldwide Interbank Financial Telecommunication in Brussels indicates that 101 countries, most in Asia and sub-Saharan Africa, use the renminbi for at least some of their trade with China. The yuan’s advance into the international market demonstrates President Xi Jinping’s goal of challenging the hegemony of the dollar and a global economic order that has traditionally been dominated by the United States and Europe.
“THIS COULD BE AN EARLY SIGNAL THAT EMERGING MARKETS ARE INCREASINGLY ADOPTING THE YUAN AS A TRADE CURRENCY IN PREFERENCE TO THE DOLLAR.” Sure enough, analysts note the renminbi’s growing popularity as an alternative trade currency, having spread from China's core trade partners to smaller nations, particularly in emerging markets. The list includes India, Zimbabwe, Angola, South Africa, Ghana and Mauritius as well as the African economic powerhouse Nigeria, where the yuan comprises some 10 percent of the country’s foreign reserves. “This could be an early signal that emerging markets are increasingly adopting [the yuan] as a trade currency in preference to the dollar,” said Helena Huang, China economist at London’s ICBC Standard Bank, talking to The China Daily late October. A 2016 HSBC report predicts that by 2020, the yuan will be used in half of China’s international trade, compared to around 20 percent currently. The currency swap should make it easier for Chinese investors to set up shop in Egypt, a key goal as Cairo has been courting Chinese companies to invest in planned megaprojects like the Suez Canal Economic Zone and the socalled administrative capital. According
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In Depth
to an August report by the Egyptian Businessmen’s Association, there are more than 1,200 Chinese companies doing business in Egypt with investments totaling $500 million. “Having CN¥ 20 billion in the local banks will massively benefit Chinese companies wanting to import supplies from their headquarters in China,” says Fadel Yacoub, an economics professor at Ain Shams University. However, there are serious risks associated with what is “similar to a commercial loan with the pound acting as a collateral,” writes Hany Genena, head of research and head of equities strategy at Beltone Securities, in a message. Ihab el Desouky, head of the economics department at Sadat Academy for Management Sciences, worries about how Egypt will pay back the currency loan, noting that Egypt’s exports to China amount to just one-tenth of its imports. The currency swap would only likely exaggerate this deficit “as it becomes even easier to buy things from China,” says Ahmed Adam, a former head of research at the local arm of the National Bank of Abu Dhabi. However, the wind appears to be blowing in Egypt’s favor, currency-wise. While the dollar has surged against other currencies following the presiden-
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tial elections in the United States, the renminbi’s value has been falling steadily since January 2014. The yuan dipped to its lowest level against the U.S. dollar in more than eight years in late November. Many analysts have predicted that the yuan will keep dropping against the dollar in the coming years, which would bode well for Egypt in a currency swap. In trade talks in Washington, D.C. late last month, Chinese deputy trade representative Zhang Xiangchen disputed charges from some that China is deliberately keeping the yuan artificially low to boost exports as its growth has slowed. Many economists also agree that China no longer manipulates its currency. In any case, Adam is skeptical that a currency swap with China would have any significant effect on helping to reverse Egypt’s ongoing foreign currency shortage, given that China, big as it is, only accounts for 7 percent of Egypt’s total trade. “To secure basic goods such as wheat, sugar and other commodities, we still have to rely on the rest of the world, which deals in dollars,” says Adam. Gala Abdel Gawad, former head of the Central Bank of Egypt’s foreigncurrency management division, says, “A swap doesn’t really do anything to address the dollar deficit, and now it will
be more complicated, as the government needs to secure both dollars and yuan. But Raafat el Shabrawy, an international trade professor in Menofia University, says that the currency swap is a no-brainer given both Egypt’s dollar shortage and the growing international profile of the yuan. “On a most basic level, Egypt needs to have a sufficient currency supply from all internationally recognized currencies,” says Shabrawy. “We have always had a limited supply of yuan in our treasury; hence, the swap was a must.” Ultimately, diversifying the currencies that can be used for international trade could reduce Egypt’s longtime dependence on the U.S. dollar—a situation that can lead to drastic consequences that have become all too clear recently. Magd el-Din el Manzalawy, deputy head of the Engineering Export Council and head of the taxation committee at the Federation of Egyptian Industries, believes that, in the long run, a Chinese currency swap could ultimately help stabilize the value of the Egyptian pound following the Central Bank’s recent currency float. “Diversification is a must to prevent panic attacks on one currency,” he says.
KAREEM EL SHARNOBY
BANKING
ARAB FINANCIAL INSTITUTIONS REPLACE EUROPEANS BY TAMER HAFEZ
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gyptian banks have been selling like hot cakes, and Arabs are the ones buying. In October, Barclays completed the sale of its Egyptian operations to Morocco’s Attijariwafa Bank for $500 million—part of a larger strategic shift by the British bank to sell off its African branches and focus on its United States and UK properties instead. The purchase followed a bidding war with the UAE’s biggest bank, Emirates National Bank of Dubai, which had been shop-
ping for another Egyptian property following its 2013 purchase of the local arm of BNP Paribas, a French bank, also for $500 million—that time beating out Attijariwafa. Shayne Nelson, Emirates NBD’s CEO, told The National in March that the bank was more than pleased with its first Egyptian acquisition. “It’s beaten all our expectations, despite the difficulties” presented by an ongoing hard currency shortage and the generally weak economic climate, he said.
“Gulf banks have been big buyers of financial institution assets in MENA emerging markets countries in the past year, and we expect the trend to continue in the next few years,” wrote Timucin Engin, a credit analyst with Standard & Poor’s, back in 2013. Indeed, since 2012, six Arab world banks have purchased the Egypt operations of European financial institutions, some of which had been doing business here for half a century. The trend reflects a dramatic strategy shift among European banks away from
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investments in emerging markets that once promised long-term growth opportunities. Instead the banks are focusing on their core Western markets, seeking to shore up their balance sheets and reduce risk following the aftermath of the 2008 financial crisis. Meanwhile, Arab world banks, especially in the Gulf, are flush with capital and have very small bankable populations at home—so they’re looking to neighboring markets like Egypt and Turkey. “Banks in the Gulf are tempted by the large and young populations,” wrote Engin in the S&P report. “These are also countries with visibly lower bank penetration, which signals long-term growth opportunities.” Analysts agree that the number one strength of Egypt’s banking sector is its potential: currently, just 10 percent of its 90 million plus citizens have bank accounts. “Any bank working in Kuwait or the Gulf in general believes that Egypt has the largest potential in the Middle East and North Africa,” said Michel Accad, the CEO of Kuwait-based Al Ahli Bank of Kuwait, in an interview last month with The Daily News Egypt. ABK bought the Egypt operations of Greecebased Piraeus Bank in 2015 for $150 million. The allure of Egyptian banks is in its large population and the fact that 90 percent of jjits people are “unbanked.” Monsef Morsy, a senior banking analyst at CI Capital, adds that many of them have enough cash stuffed in their mattresses to open bank accounts. For example, the government’s 2014 sale of investment certificates at 12-percent interest to finance renovations to the Suez Canal was a huge success, with nearly half of the LE 60 billion in certificate sales coming from outside the banking sector. “It shows that with the right product, Egyptians will deposit their money in banks,” says Morsy. The Arab bank buying spree is happening despite a bitter economic climate in Egypt that has featured scarce foreign currency and commodities shortages. Nonetheless, Egyptian banks have managed to average annual equity returns of 24 percent, said Central Bank Governor Tarek Amer at a press conference in August. Amer credited banking reforms
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BUSINESS MONTHLY ARCHIVES
In Depth
levied starting in 2004, saying they’d helped steer the sector through the political and economic turmoil the country has experienced since the 2011 revolution. Commercial retail banking for individuals is relatively new in Egypt, gaining traction only after a series of high-value non-performing loans in the early 2000s threatened to collapse the banking system, spurring the Central Bank to liberalize and consolidate the sector. The reforms have paid off, according to CBE statistics, with deposits more than doubling to LE 1.7 trillion since fiscal 2010/11. With an eye toward the vast financial potential of Egypt’s unbanked millions, Qatar National Bank announced in December 2012 that it would buy a majority stake in the Egyptian operations of France’s National Société Générale Bank in a $1.97 billion deal. QNB CEO Ali Shareef Al-Emadi said in a statement that the bank was drawn to Egypt for its “growth potential.” The more recent acquisitions have given several new players a foothold in the Egyptian market, including The National Bank of Abu Dhabi, which purchased some of CitiBank’s local assets in 2015 (its loan portfolio went to Egypt’s CIB), and the Arab African International Bank, a Kuwaiti joint venture with Egypt’s Central Bank that
took over Bank of Nova Scotia’s local loan and deposits portfolio. Half of Egypt’s banks are now wholly or partially owned by regional players. The UAE leads the pack with five banks, while Saudi Arabia, Bahrain and Kuwait each own two banks apiece. Qatar, Jordan and Morocco each have one. In addition, banks based in Lebanon, Libya, Kuwait and Iran are involved in joint ventures with the government or local concerns. Amid the slump that followed 2011, European banks, along with other Western investors, fled the market—especially after officials dawdled on implementing free-market reforms economists had stressed were crucial, says Amr Abdel Bary, a banking professor at the Arab Academy for Management Sciences. Meanwhile, stricter global regulations enacted in the wake of the 2008 global financial crisis limited the amount of risk banks can take on. The European exodus comes despite the fact that Africa, for example, is an enormous growth market for the industry. Before the global financial crisis, “more than 50 percent of trade finance in sub-Saharan Africa...came from European financial institutions. Today it is virtually nil,” said Barclay’s former CEO Bob Diamond talking to financial publication “The Banker” earlier this year.
The only Western banks still in the local market are France’s Credit Agricole and Britain’s HSBC. Since Egypt caps the number of banking licenses at 40, new banks can only enter the market when someone leaves. So far, Arab banks have pounced on every vacancy. It has certainly helped that particularly since Abdel Fattah el-Sisi took power, Egypt has nurtured strong ties to its Gulf neighbors, with the wealthy, oil-rich states giving Egypt billions in economic aid (its recent spat with Saudi Arabia notwithstanding.) Cross-border networks benefit local companies looking for exposure in new regional markets, particularly in Morocco, Qatar, Kuwait and Dubai, which have all debuted in Egypt’s banking market since 2012. Only Saudi Arabia, which has a relatively large, young indigenous population with a lower bank penetration than the Gulf average, is not expected “to be an active buyer” of financial institutions outside its borders, wrote Standard & Poor’s. Currency flows will come and go to completely new countries,” says Sameh Salah, deputy general manager and corporate branch manager at the Arab African International Bank. “It will also mean more investment from these countries, as they find Egypt an easier place to do business, thanks to the presence of the same bank they deal with at home.” It should also ease the transfer of remittances from some 4 million Egyptian expats currently working abroad and wiring money home from other Arab countries. On the other hand, Egypt is struggling to recover from half a decade of economic doldrums and faces limited prospects for GDP growth. Meanwhile, the CBE has implemented recent measures to push banks to loan money to small businesses, which are traditionally considered high-risk clients. “Buying an Egyptian bank brings risks to North Africa and Gulfbased acquirers but can offer good expansion and diversification opportunities, and boost group profits over the medium to long term,” wrote interna-
BUSINESS MONTHLY ARCHIVES
In Depth
tional credit-rating agency Fitch Ratings in October, noting the local banking sector’s relatively high margins. “But investing in one of Egypt’s banks can be risky because they operate almost entirely in the volatile domestic market.” The steep depreciation of the pound has exposed parent banks to “exchange-rate risks,” Fitch wrote, while currency controls levied by the CBE have made it difficult to repatriate profits. That said, the creditrating agency still deems Egypt’s banking sector strong enough to withstand these risks. “Overall, asset-quality indicators are holding up well in Egypt,” despite them being lower than region-leading GCC countries, Fitch noted. “Egypt's banks are a strength in our assessment of the sovereign's rating of 'B' with a Stable Outlook.”
The eagerness of Arab banks should also bode well for Egypt’s ongoing push to privatize state-owned enterprises. This is the first time since 2006, when the Italian banking group Intesa Sanpaolo bought a majority stake in the publicly owned Bank of Alexandria, that the government is discussing a partial sale of some of its state-owned banks, either through an IPO or a direct buyer. Banque Du Caire and United Bank are the most likely to be privatized, CBE Governor Tarek Amer told reporters earlier this year, adding that the CBE is planning to sell a 40 percent share in the Arab African International Bank. “Egypt’s banking sector’s fundamental strengths remain intact,” says Ahmed Koura, former chairman of Al Watany Bank of Egypt.
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The Road Less Traveled
Getting from place to place in the Egyptian capital involves choosing between cheap public transport that’s packed or dangerous and unreliable—or all three—or sitting in traffic that gets worse every year. But recently, a handful of startups—from mobile traffic apps to water taxis—are trying to make it easier to move around Africa’s largest city.
KAREEM EL SHARNOBY
BY EDMUND BOWER
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KAREEM EL SHARNOBY
Cover Story
MICRO-MANAGING: MOST EGYPTIANS ARE FORCED TO RELY ON AN ELABORATE INFORMAL TRANSPORT NETWORK THAT OPERATES ON ITS OWN LOGIC.
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hen Abdo Mohamed returned to his native country of Egypt in 2008 after growing up in Saudi Arabia, he felt lost. He had no idea how to navigate the two-hour commute to his university in Abbassiya, where he was studying computer engineering, and there was no map or schedule to help him navigate Cairo’s chaotic bus network. So he did what everyone else does—he asked strangers for directions. But in Egypt, he quickly discovered, “people don’t like to say ‘I don’t know.’” One day, he recalls, after asking a passerby for help and ending up on the wrong side of the city,“ I decided that there has to be a better way.” In 2011, Mohamed launched Arkabeh (What should I ride?), a free mobile app that helps people navigate
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public transportation in the Egyptian capital. You simply punch in where you want to go, and Arkabeh tells you which buses or trains to take to get there. To map the city’s microbuses—the sprawling, informal network that most Egyptians rely upon to get around— Mohamed and his partners recruited everyone they knew via social media to send the details of their local commutes, which he and his team painstakingly confirmed on foot. However, when he contacted the Cairo Transport Authority for information on city bus routes, he was shocked to learn that there was no public bus map. Instead, the CTA gave him a stack of paper listing the start and end points of the various routes. Of course, adds Mohamed, “There was no digital data.” Today, Arkabeh is just one of a slew of apps and other digital services that are trying to help compensate for
Cairo’s patchwork public transportation system, which is infamous for being among the most inadequate in the world. As more and more Egyptians have smartphones with mobile Internet connections, such services have become the latest wave of private-sector efforts to help fill the gaping transportation gap in Africa’s largest city, where an organic, informal web of micro and minibuses has emerged over the years—as well as tuk tuks and taxis—to convey people from here to there. Decades of fuel subsidies have made driving relatively cheap and discouraged the development of other methods of transportation in the Egyptian capital. But this situation, combined with rising population growth and badly designed roadways has led to a situation in which traffic costs Egypt nearly 50 billion annually, around 3.6 percent of GDP, according to the World Bank. Its roadways are
KAREEM EL SHARNOBY
Cover Story
STREET SMART: STARTUPS THAT SET OUT TO NAVIGATE CAIRO’S PATCHWORK TRANSIT SYSTEM DISCOVERED THAT NO MAP EXISTS EVEN FOR CITY BUSES.
also among the most dangerous in the world. Every day, reports the World Health Organization, an average of 35 Egyptians die in traffic accidents, which is the number one cause of death for young people between the ages of 5 and 25. The thousands of microbuses that ply the streets of Cairo are especially dangerous and corrupt—with reckless drivers and haphazard stops and operated by shadowy cartels. Projects to improve Cairo’s public transit system have been in the works for years, but recently, in the wake of rising fuel prices and gridlock that’s reached hair-tearing proportions, the appetite is bigger than ever for creative solutions. Arkabeh.com, which first launched as a website the October after the 2011 revolution, drew 500 visitors in its first night, according to Mohamed. He boasts that he and his four partners—all friends from university—subsequently
partnered with a local newspaper to create a program for the 2012 presidential election that helped citizens find their way to their local polling station via public transport. This past April, they relaunched an updated version of the app in April that, according to Mohamed, has since been downloaded 20,000 times. A handful of similar services have popped up since, including Rawa7 (Go Home), an app begun by another Egyptian programmer, Mohammad Tayseer, who recently agreed to merge his program with Arkabeh, and Transport for Cairo, which was formed in 2015 by a group of young activists with backgrounds in economics, urban planning, architecture and civil engineering. They were inspired by an ambitious 2014 project by MIT and Columbia Universities in cooperation with the University of Nairobi that mapped the elaborate, informal microbus network of matatus, the
mini bus system of the Kenyan capital—another example of an urban transit system that runs on its own unregulated system of logic. Informal networks of minibuses, supplemented by everything from motorbike taxis to rickshaws, are the norm throughout the developing world. But for a city of more than 20 million people, Cairo’s patchwork transit system is particularly oblique. “In London, if I want to take the bus, I go to the station and look at the map,” says TfC’s program manager, Mo Elkhateeb, a 27-year-old with a circle beard who is currently pursuing a degree in environmental governance in Germany. In Egypt, however—apart from a basic Metro map—there’s only one way to find out how to get where you want to go. “You have to ask people,” says Elkhateeb, who says he knows native Cairenes who don’t ride the bus simply because they are mystified as to which one goes where.
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KAREEM EL SHARNOBY
Cover Story
BAD CAR-MA: FUEL SUBSIDIES AND LACK OF TRAFFIC LAWS MEANS CAIRENES WASTE AN AVERAGE 225 HOURS A YEAR STUCK IN TRAFFIC.
In theory, city buses operate on set schedules and routes, but these have little correlation to reality. “Theoretically, there are bus stops,” says Elkhateeb, “whether they are used or not is up for debate.” In fact, few locals know much about Cairo’s bus system—formal or informal—outside of the lines they take every day. So the group set about mapping the bus system the same way as the Nairobi researchers—by riding them. They also got volunteers to send them geotagged photos of buses en route to confirm their data.
Motor city
Every day, 24-year-old Mahmoud Omar takes two buses from his home in the satellite city of New Cairo to Ain Shams University in Abbassaya, where he’s working toward a degree in
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accounting. If he’s lucky, Omar can make the 20-kilometer journey in about an hour, but “if there’s a lot of traffic,” he says, “it can take double that.” The only relatively reliable, safe method of public transit in Cairo is the Metro, which first opened in 1987. By 1998, the subway accounted for nearly a third of all public-transport trips. Today, well over 2 million people ride the Metro daily, even though it only goes to very limited parts of the capital: most of Giza, Zamalek, Nasser City and Moqattam are beyond its reach, as well as the satellite communities of 6 October City and New Cairo. The Cairo Metro Authority currently operates just four kilometers of track for every million people in Cairo, compared to London Underground’s 166. In the meantime, cars have multiplied on the streets of Cairo, despite
Business Monthly – December 2016
the fact that just a small privileged minority can afford to own one. In 1971, cars accounted for just 8 percent of all transport in Greater Cairo, according to the World Bank; by 1998, they made up 20 percent of all journeys. In 2002, the government’s Transportation Master Plan for the Greater Cairo Region predicted that the total number of cars would increase by more than 4 percent per year, reaching more than 2.5 million by 2022. Haphazard parking, sometimes two to three rows deep and encouraged by the almost total absence of parking laws, has aggravated the gridlock. According to the World Bank, Cairenes waste an average of 225 hours a year stuck in traffic. Vehicles in Cairo average speeds of just 15.8 kilometers per hour, compared to 26 kilometers per hour in London, Europe’s slowest-moving big city.
KAREEM EL SHARNOBY
Cover Story
A LITTLE HELP FROM OUR FRIENDS: THE UAE RECENTLY DONATING 600 NEW PUBLIC BUSES TO SUPPLEMENT CAIRO’S AGING COACHES.
Trying to help you move faster are local traffic apps like Bey2ollak (It Tells You), a platform for drivers to share real-time data on congestion levels on various roads. Co-founder Gamal El Din Sadek, a 28-year-old computer programmer, describes the app as “Twitter for traffic.” Having celebrated its sixth anniversary in October, Bey2ollak has some 1.3 million users, who rate the congestion of roads in Greater Cairo and Alexandria on a five-point scale from “sweet” to “no hope.” People also share photos of the streets, traffic news (a three-car pileup on the Ring Road, for example) and other gridlock related information. “We’re just trying to help you make the best decision out of this chaos,” says Sadek, who has thinning hair and a slight lisp. Considered a trailblazer in the Egyptian startup world, Bey2ollak currently employs around 30 full-time
staff members in its open-plan offices on the Corniche in Maadi. It’s won coveted sponsorships from corporations such as Vodafone, Huawei and Shell, which are keeping the company afloat for now. Six years in, Sadek admits: “The toughest thing is the business model—I can’t say it’s 100-percent figured out.” Though in the world of tech start-ups, having a proven way to make money isn’t nearly as important as how much buzz is created by your brand. In a lengthy 2006 report on the sorry state of Cairo public transport, the World Bank blamed “unsustainable subsidies” that kept fares artificially low for producing an “underdeveloped, overcrowded and unreliable” transit system. “Public buses are poorly maintained and many are out of service,” wrote the authors. Last year, a study by The American University in
Cairo, quoting the Cairo Transit Authority, reported that 2,408 city buses were in service, out of a total of 2,647. As part of the largesse of the Arab Gulf following 2013 and the ouster of Mohamed Morsi in Egypt, the United Arab Emirates announced in 2015 that it would donate 600 brand new public buses in order to help bolster public transit; currently, shiny, colorful buses marked “Made in the UAE” can be seen cruising the streets alongside their older, black smog-puffing counterparts. But even still, the numbers of public buses pale in comparison to microbuses, which numbered some 20,000 back in 1999, according to officials estimates, which say there could now be as many as 80,000. For years, the government—failing to provide adequate transit alternatives— has tacitly tolerated microbuses. In recent years, however, officials have
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KAREEM EL SHARNOBY
Cover Story
THE HIGH ROAD: UPSCALE BUS AND CAR POOLING SERVICES AIM TO MAKE MONEY AND HELP GET EGYPTIANS OUT OF THEIR CARS.
switched to overtly encouraging the private sector to get involved in providing basic services from health care to transportation. Already, Cairo’s buses are operated by an assortment of firms. In addition to apps that help you navigate public transit and unpredictable traffic are a growing number of concerns that see a potentially profitable niche for Cairenes who might leave their cars at home if there was a safe, convenient alternative.
Jump in the pool
Earlier this year, a UAE-based transport firm called the Emirates National Group—which operates Abu Dhabi’s public-bus service—bought a 70-percent stake in the Egyptian Advanced Co. for Public Transportation, otherwise known as Misr Bus, which was operating about 90 local public buses. Changing the firm’s name to Mowasalat Misr, ENG plans to roll out
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500 new buses outfitted with air conditioning and Wi-Fi, which are scheduled to begin appearing on city streets by the end of the year, said CEO Ahmed Aboos. The strategy is to charge slightly more for a comfier ride, thereby drawing people who don’t normally take the bus. “There are opportunities within the middle and upper classes,” says Aboos. He’s confident that, by offering better bus service, Mowasalat Misr can get people out of their cars, helping to free up Cairo’s congested arteries, save lives and reduce pollution. Mowasalat Misr is just the latest in a handful of similar “smart bus” initiatives, which have been met with mixed reactions. Buseet, which launched earlier this year, is a webbased service you book in advance that offers “comfortable seats, AC and a cashless experience,” in addition to wireless internet service for LE 20 to LE 30 a trip—compared to LE 1 to LE
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2 for public bus trips—running on commuter routes between downtown Cairo, Giza, 6 October City, New Cairo and Maadi. Similar upscale commuter services such as Tawseela and Bus Pooling, which offer monthly subscriptions, and Pie Ride, a carpooling app (“Start enjoying Cairo’s traffic”) also aim to lure people out of their cars. And new enterprises like these aren’t just appearing on Cairo’s roads. Nile Taxi is the brainchild of Magdi Kirollos Ghali, a portly 52-year-old with an MBA from Harvard. Ghali sold yachts on the North Coast until 2007, at which point he decided to combine his business acumen with his love of boating to contribute a unique transportation service that was badly needed. “It took a while to prove to the government that we could do it,” he says. It took Ghali and his partner, Amr Aboul Seoud, six years to cut through
KAREEM EL SHARNOBY
Cover Story
RIVER OF DREAMS: PRIVATE SERVICES LIKE NILE TAXI ENABLE COMMUTERS TO TAKE ADVANTAGE OF A LITTLE-USED BUT HIGHLY EFFICIENT THOROUGHFARE.
all the red tape. But in 2013, Nile Taxi made its maiden voyage. Today, they have two mini-ferry boats operating 10 trips daily on weekdays during commute hours between Maadi and Shubra, with stops in Giza, Zamalek and along the Corniche. Nile Taxi also offers a charter speed-boat service for up to five people that you can order the same day at LE 200 a trip. Then there are mobile taxi apps like Uber and Careem, which have both debuted in the Egyptian market within the last two years. Uber in particular— the world’s most valuable startup— drew scattered protests from Cairo taxi drivers shortly after launching in the country. But these complaints were largely drowned out by a chattering class that was thankful for an alternative to white cabs. In fact, earlier this year, the firm named Cairo its fastestgrowing market in the Middle East. “Innovative technologies can play a crucial role in helping people get
around,” said Anthony Khoury, general manager of Uber Egypt, in an August press release announcing that the San Francisco-based company— which now has 30,000 “partner drivers” in Egypt—plans to invest LE 500 million in the country as part of a larger LE 2.2 billion investment in the region. Khoury also boasted that Uber is “creating valuable economic opportunities at a time when unemployment remains all too common in the Middle East,” though some have criticized the $80-billion company, saying its freelance work-when-youwant set-up is merely a way to avoid giving workers benefits and job protection and doesn’t provide for thorough screening of drivers. Indeed, while there are clearly benefits to turning public transport over to the private sector—competition and free-market efficiency, namely— the task of moving around Cairo has gotten even more bewildering in the
last few years, given the sheer number of apps, smart buses and transport related websites. With many of them offering similar services, only time will tell which of these outfits will survive. In the meantime, it seems clear that some of these startups, not to mention their clientele, could benefit from joining forces or perhaps sharing the data they’ve collected on Cairo’s labyrinthine transportation network. Arkabeh, for example, has so far mapped around 80 microbus routes (out of an estimated 450) and built a solid working app, while Transport for Cairo has gathered data on 20 city bus routes and has a more polished looking website. Sadek, for one, laments that the “treasure trove” of traffic data gathered by Bey2ollak’s hundreds of thousands of daily users isn’t being harnessed for the public good. “We know that lots of research could be done with our data,” he says.
Business Monthly – December 2016
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Stock Analysis
Free at last
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t’s not every day that you get so see advances beating declines by a ratio of 12-to-1. But the market has been in a state of euphoria since Nov. 3, when the Central Bank of Egypt announced its bold decision to float the pound. Egyptian equities have been undergoing a wave of repricing ever since to make up for the valuation gap created by the float. The reaction was across the board during the period from Oct. 15 to Nov. 15, with the EGX 30 (up 25.1 percent), the EGX 70 (up 21.3 percent), and the EGX 100 (up 23.2 percent) all registering double-digit gains. The former—the free-float market-cap weighted market benchmark—was up some 52 percent year-to-date, with 45 percent of the gain driven by CIB shares. Yet, the EGX 30 is still in red territory in dollar terms, down 24 percent as of Nov. 15. The EGX was valued at 14.4 times 2016 earnings versus its five-year average of 10.6 times and the MSCI emerging markets’ 13.1 times. As for stocks, the gainers’ list was led by relatively high-beta large caps, as one would have expected, namely Alexandria Containers (ALCN, up 76 percent to LE 137.60), Arabian Cement (ARCC, up 61 percent to LE 7.93), and Domty (DOMT, up 52 percent to LE 7.69).
Investors usually jump to market leaders when they turn positive on a market, which can eventually cause a snowball effect in which their buying pushes up demand and hence, stock prices, even further. Meanwhile, equity analysts have been rethinking their forecasts in view of the new normal of a free-market valued Egyptian pound, predicting higher prices and higher interest rates. Exporters should benefit, including firms like Oriental Weavers Carpet (ORWE) and Lecico Egypt (LCSW), while importers of raw materials—such as Cairo Poultry (POUL) and Edita (EFID)—are likely to be hurt. However, this is not as clear cut as it sounds. We have to take into account the balance-sheet factor, where leveraged companies with foreign-denominated debt will suffer a lot unless they have enough cash flow to offset their higher interest payments. Last but not least, some foreign investors—who have been waiting on the sidelines for several months for the exchange rate to stabilize—have jumped back on the bandwagon, but many more are still waiting for the dust to settle before committing capital. CBE authorities will have to show skeptics that they’re serious about a free-market float before they jump in with both feet.
IN THE SPOTLIGHT
Arabian Cement Arabian Cement (ARCC) was the first Egyptian cement company to make the switch from natural gas to coal and refuse-derived fuel to run its factories. Since its IPO in May 2014, the company has been a leader in the cement sector in terms of trading liquidity. With a market cap of nearly LE 3 billion, Arabian Cement is currently at 15.5 times 12 months of earnings. The stock was buoyed along with the rest of the market last month, rising 61 percent from LE 4.92 to LE 7.93. Around 85 percent of the jump came after the floatation of the Egyptian pound; shares rose during nine subsequent trading sessions.
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Business Monthly – December 2016
Market Watch
Capital Markets Egyptian price indices - EGX 30
10640
EGX 30
Egyptian price indices - EGX 70
419
EGX 70
Selected sector performance
Business Monthly – December 2016
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Market Watch
Capital Markets Corporate News Raya launches Aman for E-Payments Raya Holding (RAYA) launched a new subsidiary, Aman for E-Payments, which is set to begin operating in the fourth quarter of 2016. The service is to offer nationwide coverage, with 70,000 points of sale across all governorates. In other news, Raya Holding changed its full name from Raya Holding for Technology & Communications to Raya Holding for Financial Investments.
Edita raises prices Snack maker Edita Food Industries (EFID), which controls more than half of Egypt’s cake market, increased the prices of its Todo cakes by 50 percent to LE 1.5 a pack. The rise came in the wake of the declining value of the Egyptian pound. Todos account for more than 15 percent of Edita’s revenues.
HSBC Egypt Money Market Fund, raising the firm’s Egyptfocused assets under management by 18 percent to LE 10.5 billion. The total number of mutual funds managed by EFG Hermes Asset Management in the Egyptian market now totals 16 across various asset classes, accounting for six out of 26 local money-market funds.
Beltone revises share float Beltone Financial (BTFH) has changed plans to sell 11.83 million, or 7 percent, of its stock at LE 12.56 a share. Orascom Telecom Media & Technology Holding (OTMT), Beltone’s largest shareholder with an 81.3-percent stake in the firm, is planning to sell just 7.7 million shares. As a result, Beltone’s float would increase from 5.1 percent to 9.6 percent, while the remaining 14 percent will still be owned by Act Financial.
Palm Hills New Cairo pre-sales reach LE 1 billion
SODIC to raise capital Sixth of October for Development & Investment (SODIC) will raise its issued capital by 1 percent, meaning it will rise by LE 13.6 million, which is to be allocated to the company’s employee incentives program. SODIC’s currently has LE 1.36 billion in paid-in capital spread over 338,909,573 shares with a par value of LE 4.
Palm Hills Developments (PHDC) said it’s managed to raise LE 1 billion in new pre-sales of independent units in its Palm Hills New Cairo project. The project is part of a codevelopment deal to build an integrated housing complex in eastern Cairo over an area of 2.1 million square meters, including 100 feddans earmarked for commercial projects.
EFG Hermes expands
Orange telecom expands
EFG Hermes Holding (HRHO) announced that it would offer two new services under its brokerage and asset management lines. Hermes is partnering with Saxo Bank, an online multiasset trading and investment specialist, to integrate the latter’s SaxoTraderGO platform with the former’s new online trading platform, EFG Hermes One. The new product promises to provide clients with one-click financial access. Meanwhile, Hermes has taken over the management of a LE 1.6-billion
Orange Egypt (OREG), formerly Mobinil (the Egyptian Co. for Mobile Services) and now part of France-based Orange telecom, said its investments in Egypt have reached LE 32 billion since it first started in 1998. Orange plans to inject nearly LE 2.5 billion to develop the local network. The company invested $484 million to acquire a 4G license from Egyptian regulators while securing a €500-million credit line from its mother company.
International stock price indices Nov.15
Oct.15
Aug.15
June 15
value
% change
value
% change
value
% change
DOW
18,923.00
18,138.00
4.33%
18,636.00
1.54%
17,640.17
7.27%
NASDAQ
5,275.62
5,214.16
1.18%
5,262.02
0.26%
4,834.93
9.11%
S&P 500
2,180.39
2,132.98
2.22%
2,190.15
-0.45%
2,071.50
5.26%
FTSE 100
6,792.74
7,013.00
-3.14%
6,941.19
-2.14%
5,966.80
13.84%
NIKKEI 225
17,669.15
16,856.00
4.82%
16,869.56
4.74%
15,919.58
10.99%
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Business Monthly – December 2016
Market Watch
Money & Banking INTEREST RATES
BANKING & RESERVES (in millions of LE) 2016
End of
August
January
February
March
April
May
June
July
Reserve Money
418,881
410,150
430,378
442,281
464,664
478,082
449,591
498,438
Int'l Reserves (net, US$ mln)
16,534
16,586
17,011
17,521
17,546
15,536
16,564
19,592
Domestic Liquidity
1,909,422
1,922,685
1,987,839
2,006,632
2,044,293
2,094,500
2,119,715
2,151,648
Foreign Assets (net)
1,391,490
140,230
1,457,994
1,466,460
1,491,322
1,521,565
1,541,213
1,557,553
Domestic Assets
1,909,506
1,922,685
1,987,839
2,006,632
2,044,293
2,094,500
2,119,715
2,151,648
17.29
17.03
18.77
18.83
18.61
18.53
18.52
Dollarization Rate (%) Discounted Bills (except CBE)
4,602
4,623
4,749
4,660
4,963
5,601
5,425
793,064
799,755
847,574
860,783
920,697
937,126
938,918
Securities (except CBE)
1,112,928
1,121,730
1,179,715
1,199,345
1,254,065
1,283,616
1,298,739
Currency in Circulation
326,179
325,132
331,977
342,842
352,896
369,321
376,908
Bank Loans (except CBE)
18.33 5,308 951,330 1,349,749 387,699
EGYPTIAN POUND EXCHANGE RATES Currency Australian Dollar Bahraini Dinar British Pound Canadian Dollar Chinese Yuan Euro Indian Rupee Japanese Yen (100) Jordanian Dinar Kuwaiti Dinar Lebanese Pound (100) Russian Rouble Saudi Riyal Turkish Lira UAE Dirham US Dollar
Nov.15 12.002 41.373 19.924 11.734 2.324 17.142 0.235 14.800 22.372 52.245 1.039 0.241 4.239 4.856 4.331 15.910
Oct.15, Amount 6.748 23.377 10.842 6.735 1.319 9.780 0.133 8.530 12.476 29.275 0.579 0.141 2.365 2.874 2.416 8.876
2016 change 77.87% 76.98% 83.77% 74.22% 76.12% 75.27% 76.54% 73.51% 79.32% 78.46% 79.45% 70.88% 79.26% 68.98% 79.25% 79.24%
Aug. 2016 Amount change 6.774 77.16% 23.4911 76.12% 11.4393 74.17% 6.835 71.66% 1.335 74.06% 9.882 73.46% 0.132 77.40% 8.740 69.34% 12.456 79.60% 29.339 78.07% 0.575 80.70% 0.137 76.22% 2.360 79.63% 2.989 62.48% 2.411 79.58% 8.858 79.62%
June 16, 2016 Amount change 6.528 83.86% 23.331 77.33% 12.541 58.87% 6.898 70.10% 1.344 72.93% 9.963 72.05% 0.131 78.41% 8.356 77.12% 12.454 79.64% 29.339 78.07% 0.579 79.45% 0.134 79.57% 2.361 79.53% 3.024 60.57% 2.411 79.62% 8.858 79.62%
Nov. 15, 2015 Amount change 5.563 115.75% 20.545 101.38% 11.891 67.55% 5.860 100.24% 1.223 89.96% 8.408 103.88% 0.118 98.87% 6.365 132.52% 10.989 103.58% 25.662 103.59% 0.515 101.75% 0.117 106.25% 2.081 103.64% 2.725 78.19% 2.126 103.74% 7.809 103.74%
Business Monthly – December 2016
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Market Watch
Key Indicators DEMOGRAPHICS 2008
2009
2010
2011
2012
2013
2014
2015
Total Population (millions)
79.1
83.5
84.5
88.0
90.2
92.2
94.7
96.1
Labor Force (millions)
24.7
25.4
26.2
25.8
27.0
27.6
28.4
28.5
Labor Force / Population (%)
32.8
33.1
33.4
33.0
32.7
32.7
31.3
32.2
8.7
9.4
9
12.0
12.7
13.2
13
13
Unemployment Rate (%)
SOURCE:
CENTRAL BANK OF EGYPT
BALANCE OF PAYMENTS (in millions of U.S. $) 2015/16
2014/15 Trade Balance
Q2
Q3
Q4
End of year
Q1
Q2
Q3
Q4
-10,430.3
-9,385.4
-9,227.6
-38,785.4
-9,985.9
-9,561.6
-9,858.5
-8,285.2
Exports
5,769.7
4,617.7
5,201.6
22,058.2
4,646.1
4,399.1
4,275.5
5,298.9
Imports
-16,200.0
-14,003.1
-14,429.2
-60,843.6
-14,632.0
-13,960.7
-14,134.0
-13,584.1
Services (net)
1,775.8
341.6
500.6
4,727.5
1,686.8
543.7
177.9
-346.7
Receipts
6,008.3
4,385.0
5,182.5
22,024.6
5,142.9
4,131.6
3,513.9
3,687.8
Payments
4,232.5
4,043.4
4,682.2
17,297.1
3,456.1
3,587.9
3,336.0
40,434.5
Balance of Goods & Services
-8,654.5
-9,043.8
-8,727.3
-34,057.9
-8,299.1
-9,017.9
9,680.6
-8,361.9
Transfers
5,797.2
4,963.1
4,926.8
21,875.7
4,318.8
3,992.7
4,131.4
4,442.2
Balance of Current Account
-2,857.3
-4,080.7
-3,800.5
-12,182.2
-3,980.0
-5,025.2
-5,549.2
-4,189.7
Capital & Financial Account
72.4
6,067.2
10,682.6
17,633.6
1,500.5
7,816.9
8,224.8
5,944.8
Foreign Direct Investment
960.0
2,947.9
689.9
6,371.0
1,385.5
1,718.5
2,772.9
992.9
-1,427.0
-29.1
4,771.0
3,724.9
3,656.7
-251.6
235.4
-827.5
Overall Balance
SOURCE:
CENTRAL BANK OF EGYPT
NON-PETROLEUM TRADE (in millions of U.S. $) Exports (Q4 2015-16) Total
Imports (Q4 2015-16)
Balance ( Q4 2015-16)
5,298.9
13,584.1
297.8
653.0
-355.2
1,594.5
4,256.1
-2,661.6
Other European countries
503.3
1,135.2
-631.9
Russian Federation & CIS
69.2
732.4
-663.2
1,690.5
2,254.2
-563.7
Asian countries (non Arab)
649.2
2,669.3
-2,020.1
African countries (non Arab)
127.9
215.5
-87.6
6.7
145.3
-138.6
359.8
1,523.1
U.S.A. E.U.
Arab countries
Australia Other countries
-8,285.2
-1,163.3 SOURCE:
INFLATION
The CPI (Consumer Price Index) and PPI (Producer Price Index) are based on the results of surveys of expenditure and consumption and relevant baskets of goods and weights. SOURCE:
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Business Monthly – December 2016
GDP GROWTH
Gross Domestic Product (GDP) growth rates are based on 2001-02 prices.
SOURCE:
CENTRAL BANK OF EGYPT
CENTRAL BANK OF EGYPT
TOURISM VISITS
Year 2014-15 2013-14 2012-13 2011-12 2010-11
Tourists 10.24 million 7.97 milion 12.21 millon 10.95 millon 13.7 millon SOURCE:
Change 28.6% -34.7% 9.2% -8.2% -12.9%
CENTRAL BANK OF EGYPT
Market Watch
Egypt-U.S. Trade EGYPTIAN EXPORTS TO THE U.S. (in millions of U.S. $)
EGYPTIAN IMPORTS FROM THE U.S. (in millions of U.S. $)
U.S.-EGYPT TRADE DEFICIT (in millions of U.S. $)
EGYPTIAN EXPORTS TO THE U.S. DURING SEPT. 2016
EGYPTIAN IMPORTS FROM THE U.S. DURING SEPT. 2016
SOURCE:
US INTERNATIONAL TRADE COMMISSION (USITC)
Business Monthly – December 2016
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Global migration
DISTANCE LEARNING The struggle to educate refugees By Amy Cass
I
n 1951, the refugee arm of the United Nations was formed to help millions of Europeans who were exiled or left homeless by World War II. At the time, “three years was deemed long enough to resolve the refugee problem once and for all,” writes Filippo Grandi, the United Nations High Commissioner for Refugees in “Missing Out: Refugee Education in Crisis,” which the agency released in September. Today, however, the worldwide refugee crisis has reached record proportions, producing heartbreaking headlines regularly, with wrenching images of children drowned during desperate attempts to cross the Mediterranean Sea to overwhelmed European authorities herding beleaguered masses into camps or onto trains. In June, the UNHCR reported that a total of 65.3 million people globally had been forced from their homes by the end of 2015, a year in which 34,000 people were forced to flee daily, four times more than a decade earlier. In fact, the number of displaced globally is at the highest since the aftermath of World War II. More than half of the 16.1 million refugees currently under the auspices of the UNHCR are children, and 6 million are of primary and secondary school age. The average amount of time a refugee spends in exile is currently about 20 years—in other words, an entire childhood. In the struggle to meet the basic needs of millions of displaced people for food, water, shelter, and safety, education has been left behind. “As the number of people forcibly displaced by conflict and violence rises, demand for education naturally grows and the resources in the countries that shelter them are stretched ever thinner,” reports the agency. While 91 percent of children around the world attend primary school,
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Business Monthly – December 2016
just 50 percent of refugee children do. The situation gets even worse at the secondary level, with just 22 percent of refugee adolescents going to school compared to 84 percent of the general population. The right to education is enshrined in the 1951 Refugee Convention, an international treaty that spelled out countries’ responsibilities to meet the needs of displaced people. Beyond the moral imperative, however, education benefits not just refugees but societies at large in ways that are hard to quantify. In addition to providing a safe place for children, education reduces child marriage, teen pregnancy and child labor. “It gives them the opportunity to make friends and find mentors and provides them with the skills for self-reliance, problem solving, critical thinking and teamwork. It improves their job prospects and boosts confidence and self-esteem.” Learning can give children “the intellectual tools to shape the future of their own countries from the day they return home, or to contribute meaningfully to the countries that offer them shelter, protection and a vision of a future.” The many benefits of educating refugees aside, there are big barriers. Despite concerted efforts, “the weight of numbers means that enrolment rates have been falling in the past few years, even in countries where determined efforts have been made to get more refugee children into school,” writes the UNHCR. A large part of the problem is that schools are simply swamped. Since 2011, the number of school-age refugees has increased by some 600,000 students annually. In 2014 alone, this population grew by 30 percent. Around 12,000 new classrooms and 20,000 teachers are needed each year to educate these children.
Global migration
With 86 percent of the world’s refugees residing in developing countries, most are living in places where governments are already struggling to educate their own citizens. Refugee education is still largely paid for through emergency funds, with little long-term planning or investment. “Traditionally, refugee education does not figure into national development plans,” observes the UNHCR report. Even when refugees technically have the right to free public education, they may be unable to afford the cost of transport or books, or they may face language difficulties. Once in the classroom, refugee students may have missed years of schooling or faced traumatic events that impede their ability to focus and learn. Many of these challenges exist in Egypt, where there were 184,966 “people of concern” registered with the UNHCR as of June, not in camps but residing among the rest of the population in cities and towns. In addition to immigrants from elsewhere in Africa, including Sudan (29,899 people as of June), Ethiopia (9,767), Somalia (6,920) and Eritrea (5,419), Egypt faces recent influxes from Iraq (6,891). But the biggest onslaught in recent years has been from Syria, with citizens fleeing the civil war that broke out in 2011 adding to Egypt’s already substantial Syrian population. The number of registered Syrian refugees here now exceeds 117,168, though the total number is estimated to be much higher. Egypt was a signatory to the 1951 refugee rights treaty. Over the years, however, “The government has limited the refugee population’s access to work permits and jobs, education, and health care,” according to the Egyptian Refugee Multicultural Council, or Tadamon, a local advocacy group. As competition for jobs has become increasingly fierce in Egypt, refugees face ever higher barriers to finding formal employment. The vast majority must turn to the informal sector in order to earn a living, often facing even lower wages and more exploitive conditions than their Egyptian counterparts. Moreover, there is no path to Egyptian citizenship for the vast majority of refugees, and even establishing permanent residence is difficult— refugees are generally forced to renew their visas every six months, though wading through the thicket of red tape required to do so confers so few benefits that most don’t bother. All of this makes it even more challenging for refugees living in Egypt to access decent, affordable education for their children. On paper, refugee children are legally entitled to go to public schools. In practice, advocates say that complex bureaucratic enrollment requirements often make it difficult for refugee kids to find spots in already overstretched government schools. In the wake of the huge influx of Syrian refugees in recent years, it’s not unusual for their children to face waits of a year or two before being enrolled in school, says Tadamon. A
September 2014 study by The American University in Cairo’s Center for Migration and Refugee Studies found that Syrian students faced problems including being held back, sometimes multiple grades, because they were unable to furnish reports from their old schools and being required to pay steep fees in order to take university exams. Compounding the problem is the already dire state of Egypt’s public schools. The World Economic Forum’s 2016 Global Competitiveness Report ranked Egypt’s primary school system fourth from the bottom out of 138 countries. In recent years, this failing system has been forced to take on “the additional task of finding school places, trained teachers and learning materials for tens or even hundreds of thousands of newcomers, who often do not speak the language of instruction and have missed out on an average of three to four years of schooling,” writes the UNHCR in its September report. Moreover, the widespread practice among Egyptians of hiring private tutors to compensate for inadequate schools is something that struggling refugee families are hard pressed to afford. “Children whose parents are unable to cover the cost of these private lessons, including many Syrian refugee families, end up failing or leaving school,” said the AUC report on Syrian refugees. Sexual harassment of girls is an added fear. Meanwhile, refugees in Egypt face “a growing atmosphere of suspicion, xenophobia and discrimination in the classroom,” noted a 2014 article by IRIN, the UN news service. “There are many schools that will simply not let refugees in,” said a spokesman for Tadamon. Syrian refugees in particular also cited “vast” differences between the Syrian and Egyptian dialects and curricula. A report by Refugee Council USA about the plight of Syrian refugees in Egypt and Jordan noted that some Syrian families in Cairo had banded together to establish “community schools for Syrians in which Syrian students can be taught by Syrian teachers.” However, according to the group, armed intelligence officers raided the schools in late 2014 and “since then, many Syrian children have been too afraid to return.” The many challenges combined with the dismal quality of public education in Egypt means that refugee families often figure it’s simply not worth it. If they take their children out of school, at least the kids can contribute to the family’s financial survival. Unfortunately, this situation feeds a dangerous, longterm snowball effect in which a lack of education feeds more violence and conflict and vice versa, “creating a vicious cycle of lost educational opportunities, conflict and displacement,” writes the UNHCR, citing long-term research. “Observed over 21 years, regions with very low average rates of education had a 50 percent chance of experiencing conflict.”
Business Monthly – December 2016 I
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COURTESY OF MANIPURI
Dining Out
A PASSAGE TO INDIA ON THE NILE BY EDMUND BOWER
I
t was Nov. 10, two days after the United States elected a reality TV star as its next president, and I thought my American friend (a diehard Democrat) might need a drink. And what better place to take your mind off things than the patio of the Sofitel Cairo Nile El Gezirah, watching the river lap against the bank. I had booked a table for 9 p.m. at Manipuri, the Indian restaurant on the second floor that opened last year in same spot as the old
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Buddha Bar, which was a magical space with an opium-den like ambiance. We arrived early enough to down a couple of beers before climbing the grand spiral staircase that leads to the restaurant. The Sofitel may occupy the best real estate in all of Cairo. Perched on the southernmost tip of Zamalek, it’s almost totally surrounded by the Nile, which furnishes a stunning view in all directions as well as a soft breeze and noise insulation from the din of the city. The
Business Monthly – December 2016
five-star hotel takes full advantage of the locale, with six riverview bars and restaurants, many of which are named Le something (Le Deck, Le Bar etc.) Apart from the redundant French prefixes, though, the place is refreshingly unpretentious. With its modern interior, simple décor, and impressive threestory windows, it is grand without being ostentatious. Well, that’s not entirely true. Manipuri’s spacious dining room is covered in Persian
carpets, and patrons lounge in colonialstyle, red upholstered armchairs with gas lamps on the tables, while gold tassels dangle from the chandeliers. The large mahogany sideboards are crammed with subcontinental knick-knacks, and assorted religious idols are stuffed casually into cracks in the walls; ebony Vishnus and brass Buddhas eye each other suspiciously from various corners of the room. Up from the center of the space sprouts a purple-lit, imperial staircase leading up to a bar—Le Duplex, naturally. My North Dakotan friend and I were seated not far from the opulent staircase, unfortunately, just as a pair of singers installed themselves on the landing with two microphones and a laptop and began belting out Egyptian pop tunes. On the other hand, the entertainment temporarily drowned out any chance of getting sucked into a political discussion. Instead, we focused on choosing our starters and ordered a couple of Margaritas on the rocks. This is one of the few places in Cairo that mixes a proper cocktail, so you may as well take advantage of it. If you’re unfamiliar with Indian cuisine, or simply don’t feel like making decisions, Manipuri offers three different four-course, set menus for LE 320 to LE 400 with a generous range of dishes from the menu. We opted to go à la carte, however, beginning by splitting a plate of Take Ki Machli (LE 78), strips of seabass fried in kerala masala batter—think Indian fish fingers. Nicely seasoned, with a pungent hit of spice, they were served with three tasty, colorful chutneys—green, purple and red—smeared abstractly across the plate rather than in little ramekins per the standard curry-house style. The waiter didn’t offer any explanation. The same sauce smears accompanied the Aloo Tikki (LE 40), two hockey-puck sized potato cakes filled with ajwain, ginger and other spices, which were soft and fluffy in the middle and almost crispy on the outside. The mains, however, were truly exceptional. From the Indian curry specialties section, we ordered the Murg Kadhai (LE 120), named for the traditional pot it’s cooked in—pieces of mouthwatering boneless chicken floating in a spicy tomato sauce along with chopped onion and
COURTESY OF MANIPURI
Dining Out
bell peppers. The sauce alone had us ripping apart pieces of buttery, blackened Garlic Naan (LE 15) to soak it up, though it was equally tasty poured over the Jeera Pulao (LE 25), basmati rice prepared with cumin seeds. The Jhagi Lamb Chops (LE 160) turned out to be a small pile of meaty medallions hanging off charred bones, once again plated atop the ubiquitous tri-color sauces. Marinated in ginger and coriander, they were as tender as roasted lamb chops get, the spicy, juicy meat melting off the bone. Aside from the (let’s face it, boring) fruit plate (LE 50), there are only two desserts to choose from at Manipuri— the Hot Gulab Jamun (LE 50), deepfried milk dumplings served in sweet saffron syrup with vanilla ice-cream, and the Mango Falooda (LE 52), mangoflavored milk pudding with almonds, pistachios and vermicelli strands. The sparse dessert menu may be deliberate; though, after gorging ourselves on rich curries, rice and naan bread, we had to pass on the sweets, deciding instead to finish off our drinks peacefully against the flickering gaslight. Thankfully, the singers on the stairs—around whom guests climbing up to Le Duplex had to maneuver awkwardly every five minutes or so—finally took a break. My companion, after a bit of comfort food and half a bottle of red wine, seemed in a better mood.
With dessert off the agenda, we decided to take a peek at the dimly-lit club upstairs. Le Duplex is the creation of Nicha Sursock, the Lebanese-born businessmen behind the Cairo Jazz Club, L’Aubergine, and the now-closed Stiletto Style Lounge, among others. With a long bar down the back wall, colored spotlights and a space for live music, Le Duplex certainly looks like a nightclub, but at 11:30 p.m. on a Thursday—prime time for bars—there were less than a dozen customers. On the other hand, a smoky packed room full of sweaty club goers isn’t the ideal place to be when you’re stuffed with curry, and we were happy to enjoy our digestif in peace and quiet. With its kitschy Indian decorations, ornate carved furniture and gaudy colored lights, Manipuri’s flamboyant world offers a perfect environment to step into for a bit when you no longer recognize your own. And if that doesn’t work, consider the Nile, flowing eternally north on its age-old journey toward the sea. It’s a good reminder that losing, like a good meal, is only temporary.
Manipuri
Sofitel Cairo El Gezirah 3 El Thawra Council St., Zamalek 02 2737-3737 Open daily, 7 p.m. to midnight, except Mondays
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Coworking
HOT DESKING BY EDMUND BOWER
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hrow your laptop in your rucksack, shove a mobileinternet dongle into your cargo shorts pocket, and don’t forget your flip-flops. As long as there’s Wi-Fi where you’re going, you’re set. There’s no boss; you work where you like, when you like, in whatever you like—at least until your battery runs out. This is the dream life of the digital nomad, a new breed of young people who travel the globe working remote online jobs as writers, researchers, marketers, translators and computer programmers—not to mention the throngs of would-be entrepreneurs launching their own digital startups. The bohemian lure of leaving behind the rat race for a life spent backpacking from white beaches to idyllic mountain hamlets has attracted 20-somethings from across Europe and North America, who are setting up shop in whatever warm country they can make their dollars and euros stretch the furthest. Mira Arnold, a dewy-eyed 29-year-old former engineer from Germany, moved to Dahab last year to open the CoworkInn, a venture that would combine her passion for startups with her love of scuba diving. “The weather is awesome, I love the ocean, I love the mountains, and especially I love the simple life of the Bedouins,” says Arnold from her open-plan space on the roof of the Blue Beach Club. Her concept is “digital nomads meet the original nomads.” Out of university, Arnold went to work for a company that makes medical equipment for a bit before deciding that the
corporate world wasn’t for her. Two years ago, she joined Rausgegangen, the maker of a mobile app that informs people about nearby events and activities. “The people were amazing. They were living their dreams,” she says. She had visited the Red Sea on vacation for the first time in 2008 and fell instantly in love. Egypt wasn’t really on the radar among internet wanderers, who tend to flock to places like Bali and
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Cartagena, but Arnold saw potential in Dahab, a former Bedouin fishing town that offered beautiful scenery and yearround sunshine. But it was the easy-going vibe of the place that really spoke to her. The cheap Egyptian pound was another big plus, and unlike Southeast Asia and Latin America, European mobile millennials could fly to Egypt in just a few hours, often without leaving their time zone.
The CoworkInn overlooks the Red Sea and the Saudi Arabian coast to the east, while desert mountains loom in the west. The space officially opened Sept. 1 and has since received a steady trickle of guests, mostly Germans and Egyptians but also Brits, Russians and Italians, among others, who stay anywhere from a day to a few months. Arnold partners with local hotels and camps to offer work-and-stay packages that range from €14.50 a day for basic lodging with a shared bathroom at a nearby Bedouin camp to €92 a day for an apartment at the Blue Beach Club downstairs, including breakfast and use of a swimming pool. There are discounted rates for long-term guests. On a recent November weekend, when Dahab was still warm enough for a swim in the sea, the CoworkInn hosted about 10 20-somethings, who rocked gently in hammock chairs or sprawled on colorful beanbags with MacBooks perched on their laps. The place has free Wi-Fi, of course, but Arnold also gives guests a 3.5-GB mobile-internet stick as backup for network outages, which happen frequently. There’s a handful of meeting rooms and a Skype booth as well as printers and copy machines. Nadine Schlüter, a 29-year-old from from Leipzig with an MBA, is one of a new generation of workers who cobble together a living as internet freelancers. She first heard the term digital nomad from peers at a coworking space back home, and she was inspired. “This is what I want to do,” she says, “work online, be independent and choose the places where I want to live and work.” So in mid-October, Schlüter escaped the bitter cold of east Germany for Dahab to begin a new life of globetrotting with her laptop. Schlüter finds jobs through websites like Remote OK and Upwork, where 21st-century freelancers like her can find work as “virtual assistants,” doing assorted remote jobs. At the moment, she’s researching magazine sales, an approximately 10hour assignment that will net her
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€100—a paltry sum in Germany but more than the monthly wage of many Egyptians. A growing online support network helps nomads like Schluter decide where to go next, the idea being that this freewheeling global lifestyle enables you to pack up and leave for the other side of the world at a moment’s notice without missing a day of work. Nomad List, for example, ranks potential destinations for remote freelancers in 158 countries by criteria ranging from safety to gay-friendliness. And of course, people use such sites to share experiences and to meet fellow nomads. A life spent traversing the globe has never been more accessible. Still, hanging out in remote corners of the world can present unexpected challenges, as Arnold learned the hard way after the tragic 2015 crash of a charter plane of Russian tourists taking off from Sharm el-Sheikh decimated regional tourism overnight just as she was preparing to open. “It was like a big punch in my belly,” says Arnold, who delayed the opening but eventually decided against abandoning her dreams. Despite tourists’ fears, she is confident that she can attract a critical mass of itinerant Europeans, especially during the winter months. “It’s so much more creative to work from a place like this,” she says. “You can snorkel during your work break!”
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Some, however, have criticized the growing throngs of globetrotting digerati as “neocolonialist,” saying they’re simply exploiting wealth disparities to create neat gizmos for other privileged first-worlders. A big name in the digital-nomad community is Pieter Levels, a Dutch business-school graduate who became famous for launching projects like his 2014 “12 startups in 12 months” effort, which he did while traveling the world with a single backpack, working out of coffee shops. Levels has gotten rich as the creator of sites like Play My Inbox, which gathers emailed music into one playlist, and Go F****g Do It, which offers a new way to meet personal goals. As the cost of living in major cities has skyrocketed in the last few decades, it’s not surprising that recent college graduates are moving to developing countries, where they can live much more comfortably on their earnings from the so-called gig economy. But even Levels acknowledged recently that the romantic appeal of his global wandering had worn thin. “I was standing in my apartment in Medellin, Colombia looking out the window, and I realized I don’t know anyone here,” he told a writer for Quartz in September. Levels moved back to the Netherlands this year and rented an apartment in Amsterdam.
Chamber news BOARD OF GOVERNORS
PRESIDENT Anis A. Aclimandos, Transcentury Associates
EXECUTIVE VICE PRESIDENTS David Chi, Apache Egypt Companies Ahmed Abou Ali, Hassouna and Abou Ali Law Offices VICE PRESIDENT, MEMBERSHIP Amr Allam, Misr Sons Development – Hassan Allam Sons VICE PRESIDENT, PROGRAMS Tarek Tawfik, International Company for Agricultural Production & Processing
MEMBERS OF THE BOARD Aladdin El-Afifi, ASEC Company for Mining (ASCOM) Hashem El Dandarawy, Team 4 Security Omar Mohanna, Suez Cement Group of Companies PAST PRESIDENT M. Gamal Moharam, MGM Financial & Banking Consultants
COMMITTEE LEADERS
(July 2016 to June 2017)
ADVISOR TO THE BOARD Hisham A. Fahmy
VICE PRESIDENT, LEGAL AFFAIRS Said Hanafi, Orascom Hotels & Development
Insurance Chair: Alaa El-Zoheiry, Arab Misr Insurance Group (gig) Co-Chair: Elena Butarova, MetLife Alico (Pharaonic American Life Insurance Co.)
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TREASURER Sherif El Kilany, Allied for Accounting and Auditing- Ernst & Young
Investment Chair: Hazem Badran, CI Capital Holding Co. Co-Chair: Sherif El Kholy, ACTIS
Agriculture and Food Security Chair: Abdel Hamid Badawi Demerdash, Magrabi Agriculture Company Co-Chairs: Hatem El Ezzawy, PICO Agriculture Seif ElDin Saad ElSadek, Agrocorp For Agriculture Investment
Energy Chair: Khaled Abu Bakr, TAQA Arabia Co-Chairs: Ali Bakr, ExxonMobil Egypt Ayman Khattab, General Electric International Operation Emad Ghaly, Siemens Ian LePetit, Total Egypt
Banking and Finance Chair: Nadir Shaikh, Citibank Co-Chairs: Ahmed Issa, Commercial International Bank (CIB) Zeinab Hashim, Abu Dhabi Islamic Bank - Egypt
Entrepreneurship and Innovation Chair: Alaa Hashim, Egyptian Center for Economic Studies (ECES) Co-Chair: Dina Sherif, Ahead of the Curve
Capital Market Chair: Karim Awad, EFG-Hermes Holdings Co-Chair: Sharif El Akhdar, Beltone Private Equity
Corporate Sustainability and Responsibility (CSR) Chair: Mohamed El Kalla, Cairo for Investment & Development Co-Chair: Shereen Shaheen, Pepsi-Cola Egypt
International Cooperation Chair: Sherif Kamel, The American University in Cairo (AUC) Co-Chairs: Rafeh Saleh, CID Consulting Sherif El-Tokali, UNDP
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Marketing Chair: Dalia Wahba, CID Consulting Co-Chairs: Karim El Tawil, Orange Tamer El-Araby, Nielsen Egypt Real Estate Chair: Mohamed Abdallah, Coldwell Banker Affiliates of Middle East & Greater Africa Co-Chairs: Abdalla El-Nockrashy, Majid Al Futtaim Properties-Egypt Magued Sherif, SODIC
Health & Pharmaceuticals Chair: M. Maged El Menshawy, Manapharma Co-Chairs: Mohamed Roushdy, Amoun Pharmaceutical Co. Ramy Koussa, MSD Egypt Tamer Said, GE Healthcare Human Resources Chair: Somaya El Sherbini, Microsoft Egypt Co-Chair: Maisa Galal, General Motors Egypt
Customs and Taxation Chair: Hassan M. Hegazi, Master Trading Co-Chair: Hossam Nasr, Allied for Accounting and Auditing- Ernst & Young
Industry and Trade Co-Chairs: Ashraf Bakry, Unilever Mashreq Karim Kamel, Proctor & Gamble Egypt, Ltd. Mostafa El Halwagy, The Egyptian Company for International Touristic Projects (Americana) Omar El Derini, FAOM Consult/Red Wing
Education Chair: Tarek Khalil, Nile University Co-Chair: Shahinaz Ahmed, Amideast Egypt
Information and Communications Technology Chair: Amr Talaat, IBM Co-Chairs: Ayman ElGohary, Cisco Systems International Reem Asaad, Raya Holding
Legal Affairs Chair: Hani Sarie-Eldin, The Middle East Center for Law & Development Co-Chairs: Girgis Sarwat Abd El Shahid, Shahid Law Firm J. Michael Lacey, Dentons
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Transport and Logistics Chair: Marwan El Sammak, Worms Alexandria Cargo Services Co-Chairs: Ahmed Elfangary, DHL Express Osama Fawzy Hegab, Triangle Trading & Engineering Tarek Fahmy, Mediterranean Shipping Company Willfried Wienholt, Siemens
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Travel and Tourism Co-Chairs: Cees Ursem, Air France KLM Karim El Minabawy, Emeco Travel Nelly El Kateb, Astra Travel Radek Cais, The Nile Ritz-Carlton, Cairo Women in Business Chair: Dina El-Mofty, INJAZ Co-Chair: Yasmine Mowafy, Beltone Financial
American Chamber of Commerce in Egypt – Tel: (20-2) 3338-1050 – Fax: (20-2) 3338-1060 For more information about AmCham services and news, please visit www.amcham.org.eg or our US mirror site www.amcham-egypt.org
Events REAL ESTATE
Building for the future
After seven millennia of civilization, Egyptians live on just 6.5 percent of the country’s land. “This might have been sustainable” for a country of 60 million people, as Egypt was back in the 1990s, “but not 92 million,” said Minister of Housing Mostafa Madbouli at a Nov. 27 AmCham real estate conference at the Four Seasons Cairo at Nile Plaza. He also pointed out other imbalances, such as the fact that nearly a quarter of Egypt’s population lives in Greater Cairo. In the latest government attempt to address the issue, the Ministry of Housing launched its National Urban Strategic Plan 2052 in 2012, aiming to almost double the inhabited land area to 12 percent by the middle of the 21st century. Achieving this would require the development of 60,000 to 80,000 acres of virgin land, said the minister. He noted that by 2027, new developments in places like the Suez Canal corridor, the North Coast, the Delta and Upper Egypt would be completed, including transportation infrastructure. The housing ministry’s flagship project is the 180,000-feddan New Administrative Capital, which is being financed initially by the New Urban Communities Authority. The authority will also be tasked with attracting private investors to the project, according to Madbouli. To encourage investment, the sale of state-owned land plots in the new capital will bypass existing government regulations. “We are not bound by government procedures such as tenders and auctions,” said Ayman Ismail, chairman of the New Administrative Capital Co., which was established specifically to manage the building and maintenance of the new capital. Madbouli called the project a natural expansion of New Cairo, which he said is expected to run out of land in the
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coming four or five years. The new capital is expected to house up to 4 million people in the next decade. “The idea is to develop a different settlement compared to New Cairo,” which is a mostly “local” Egyptian suburb. Officials hope the new city will be a magnet for foreign investment and “serve as a new symbol of Egypt.” People migrating to the new capital, will, said Madbouli, free up Greater Cairo to become more of a cultural hub, while the new capital will become the technology, business and financial capital of Egypt, as well as the government headquarters. During phase one, which is expected to start in first quarter of 2017, construction will begin on 18 ministries, a presidential complex, a parliamentary building and another to house various supreme councils, including the Supreme Council for Investment and the Supreme Council for Energy. For these new projects to help solve Egypt’s housing shortage, Orascom Development Holding Chairman Samih Sawiris believes that the government needs to give private developers more freedom and incentives to build low- and middle-income developments. “The government is entering the market as a real estate developer… which is an economic burden,” said Sawiris, adding that the state “lacks the know-how” of private developers. He also noted that both government and private sector will benefit more if the government issues large plots suited to housing entire cities, like El Gouna in Hurghada, which the Sawiris family built in 1990. “It now combines residential, hospitality, retail and food-and-beverage investments. It also brings in tourists, which ultimately help increase foreign currency inflow.”
Sawiris added that regulations need to be changed to stop developers from keeping their buildings half-built or empty in order to profit later from higher real estate prices. Moreover, the state should encourage mortgage subsidies to enable more youth and lower-income Egyptians to buy their own homes. The challenge, said Madbouli, is to enforce existing laws and introduce new ones to prevent investors from sitting on
real estate and only building homes for the rich, especially in the New Administrative Capital. “The government needs to show commitment to the National Urban Strategic Plan 2052 to attract investors to these housing developments, especially the New Administrative Capital, and avoid making the mistakes of the previous intended capital, Sadat City, which was scrapped in the 90s,” he said.
HUMAN RESOURCES
Salaries and economic realities On Nov. 8, the AmCham Human Resources Committee hosted a roundtable meeting to address potential salary increases in light of the rapid depreciation of the Egyptian pound and the overall economic challenges that have gripped the country. The roundtable featured Ahmed Issa of CIB and Roman Weidlich of Willis Towers Watson. The discussion addressed companies’ various strategies in response to record inflation levels and the devaluation of the Egyptian pound following the Central Bank’s recent decision to float the currency. Issa explained how the CBE’s recent moves represent the first full liberalization of the Egyptian market in 60 years. He went on to talk about how rising prices will impact various social classes. Weidlich reviewed the findings of Willis Towers Watson’s latest survey about Egypt’s current economic conditions and how
they are affecting the ability of local firms to attract and retain talent. In response to recent price hikes, a large portion of companies have asserted their intention to provide higher annual salary increases than usual. Weidlich mentioned several case studies from different countries that have experienced similar dramatic inflation hikes and how much companies raised salaries in response. He noted that they did not necessarily increase employees’ pay. Companies are dealing with rising prices in different ways. HR executives are advised to monitor inflation levels and the general economic situation to assess the possibility of a mid-year salary increase, recognize key employee segments and key talents as well as closely observing salary movements while monitoring the value of long-term employees.
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Events CUSTOMS AND TAXATION
Reform school
“Our aim is not just to increase revenue from the people who already pay taxes but also to increase the number of people paying taxes,” said Amr el Monayer, vice minister of finance, at Nov. 7 meeting of the AmCham Customs and Taxation Committee held at the Nile Ritz Carlton Cairo. Tax revenue was 12.2 percent of GDP in fiscal 2015/16, but Monayer hopes that the new VAT and other reforms will bump that to 13 percent next year. Tax revenue in emerging markets averages between 23 and 25 percent and it’s 37 percent in developed economies, he said. “We are far behind when it comes to tax revenue’s contribution to the national treasury,” said Monayer. “We want to reach emerging-market levels in the coming five years.” An issue officials are discussing with civil society groups is how the Tax Authority should deal with discrepancies among companies who had to buy dollars on the black market without paperwork to prove the rate they paid. “This problem started in 2014 but really intensified up until the floating of the pound,” said Monayer. “We are currently developing scenarios with industry bodies to come up with a reliable way to deal with it.” The VAT will allow for simplified standards for micro and small
enterprises with profits totaling less than the LE 500,000. “The executive document will also include specific detailed regulations about how companies transition from sales tax to VAT,” he said. He added that businesses want new standards for the resolution of tax disputes. A new law has been passed, and the finance ministry is talking with industry about who will sit on the committee tasked with ensuring impartial verdicts in such cases. “We really don’t want to continue to be in conflict with the private sector,” said Monayer. “We don’t just want to solve the problems, we want to eradicate the sources.”
HUMAN RESOURCES
Being aware On Nov. 9, the AmCham Human Resources Committee hosted a meeting and interactive discussion titled “Transforming Leadership in Business through Awareness and Values.” Guest speakers included Hesham El-Gamal, CEO of Quest, and Kris Morton and Marc Padberg, Middle East hub leaders for Aberkyn. “Finding creative solutions to complex business challenges and fulfilling your own professional and personal priorities is one of the biggest challenges that leaders face today,” said Padberg. He explained that becoming a more conscious leader requires a high level of personal mastery. Inspired leaders can execute effectively and resolve conflicts in challenging situations while remaining aware of the long term perspective, patterns and interdependencies of our systems. The speakers also explained that in becoming more self-aware, people develop the ability to transform their mindsets and behaviors, and can lead with greater focus, empathy and purpose. “In learning to lead
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through our values, we can engage and inspire others to make a bigger difference and achieve great outcomes,” said Morton. The outcomes of values being key to adaptive leadership are deeper self-awareness and greater insight into what drives and motivates people as well as better skills in relationship-building, a greater sense of purpose and insight into how effectively we perceive and react to our own reality.
After four decades of operating in Egypt, worldrenowned J.P. Morgan marked the occasion by organizing a reception and dinner event at the Four Seasons Nile Plaza. Extending the invitation was Daniel Pinto, CEO of the Corporate & Investment Bank and Europe, the Middle East and Africa. During the event, J.P. Morgan officials underlined the firm’s commitment to Egypt and highlighted the country’s many investment opportunities. J.P. Morgan’s operations in Egypt span corporate and investment banking as well as private banking services. “We aim to help our clients thrive and succeed in their own markets and globally and to support the growth of the local economy,” says the firm. “In Egypt, we have always focused on the importance of being there for our clients through the cycles.” This is why J.P. Morgan has consistently maintained an active presence in the country and deployed capital to support government, financial, corporate and private clients.
J.P. Morgan helps facilitate cross-border trade and investment flows. Within Egypt, J.P. Morgan has advised on numerous investment banking transactions across several sectors, attracting significant foreign direct investment and helping to activate its capital markets. Among the company’s high-profile transactions, it acted as joint bookrunner on Egypt’s highly successful $1.5 billion Eurobond issuance in 2015, attracting orders of around $4.5 billion. J.P. Morgan will also act as joint bookrunner on Egypt’s next sovereign Eurobond issuance. With the recent reforms introduced by the government along with the strong political will to implement them, the future for Egypt looks bright. In many ways, Gabriel Hauge, former Chairman of Manufacturers Hanover Trust Company, is still right. “We see Egypt emerging as the focal point of business of the Middle East. It is offering more and more important business and investment opportunities,” he said in November 1975. “Accordingly, our presence in Cairo will serve not our Egyptian clients, but the region as well.”
Events LEGAL AFFAIRS
Bring them back In light of the current economic challenges, the need for enhancing the investment climate is becoming an increasingly crucial topic. Recent government initiatives have been proposed to improve the investment climate, most notably, the proposed “investment law.” On Nov. 10, the AmCham Legal Affairs Committee hosted a meeting to address the draft legislation. It featured Mohamed Khodeir, chairman of the General Authority for Investments and Free Zones as a guest speaker. The discussion began with the question of whether it’s necessary to have an investment law. Khodeir talked about the necessity of addressing Egypt’s monetary and fiscal challenges, its investment policies, and legislative, administrative and regulatory reforms. The supreme council for investments recently released a set of incentives and measures (including fostering precise tax incentives) that are currently being adopted by all the relevant constituencies. These packages are necessary to open new investment frontiers, he said. The new investment law is expected to be passed before the end of the year. GAFI also has a detailed strategic transformation plan that aims to make processes more investor-friendly
along with a full automation plan to be completed in 2017. Khodeir asserted that the government now operates on a daily milestone basis to enhance the investment climate while supporting the private sector in taking the lead on these investment projects. He addressed common questions, such as when bureaucratic challenges will be resolved. He said that steps have been adopted at GAFI with advisory support that is aiding them in better serving their clients and better understanding investors’ needs. They are shifting GAFI employees’ Key Performance Indicators to focus on these issues. Actions are being taken across all levels to improve harmonization among relevant government bodies.
MARKETING
A shifting landscape
The media landscape has significantly changed and will continue to in the near future. This subject was the focus of a Nov. 15 meeting of the AmCham Marketing Committee, “Changing Trends in the Media Scene.” The panel discussion, held at the Four Seasons Nile Plaza Hotel, featured Hania Serry, executive marketing director at Savola Foods; Mohamed Shaaban, executive director of entertainment and commissioning at CBC Egypt; Riham El Sawy, managing director at mindshare; and Dina Hashem, managing director of Universal Media, who served as the moderator. The most apparent shift is in advertising spending, which has dwindled precipitously in the wake of Egypt’s economic slump since 2011. At the channel-level, investors have put their attention on creating new media groups, as opposed to the longstanding monopolies of the past, according to El Sawy. In light of budget cuts, advertisers are being forced to consider alternative strategies to accomodate consumers’ shrinking purchasing power. Meanwhile, inflation has catalyzed innovation trends at the channel level, said Shaaban, with broadcasters seeking to invest in new young talents. Equally important, added Hashem, is
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research, which can reduce risk significantly if done correctly. Taking this analysis one step further, she also highlighted the responsibility of big groups in setting adequate criteria for the production business. Rising prices also affect content. Serry stressed the necessity of bridging the gap between current trends on the media front and consumer realities. With public interest shifting more toward reality TV, content providers have been compelled to produce local shows and customize programming to Egyptian tastes. To maintain healthy brands and protect market share on all levels, the panel agreed that a brighter future for the industry will have to involve better communication between various actors, a deeper understanding of industry trends, more dialogue on multi-screen planning and managing resources effectively.
Member News GB AUTO GB Auto, the local Hyundai dealer, celebrated the graduation of the first batch of participants in its Safe Move campaign. The program teaches defensive driving to help drivers avoid accidents. The course includes theory as well as behind-the-wheel exercises in various simulated traffic and weather conditions. Around 1,000 bus drivers and “captains” for Careem, the mobile taxi app, took part in the pilot program. The firm is accepting participants for a second round.
SMART VILLAGES Smart Villages Development and Management Co. has appointed Ahmed Touni as its new CEO. Touni, who has some 35 years of experience in engineering, project management and real estate development, led the building of the Cairo Festival City mall. He was also vice-president of DAMAC Properties and managing director at the Contrack Stanley Group. Having built Smart Village West, a business hub with 72 buildings, the developer is currently working on Smart Village East in Shorouk City.
THE SAFIR HOTEL The Safir Hotel Cairo won a Green Star Award after meeting the standards of the Global Sustainable Tourism Council. The prize, awarded by the Egyptian Hotel Association under the supervision of the Ministry of Tourism, aims to promote public awareness of environmental issues and encourage sustainable behavior among the hotel industry and guests.
TAKATOF Takatof Association for Development has upgraded its 22nd school; the Atf Afwah Primary School for boys in Wasta in Beni Suef governorate. After the upgrade, it serves 936 students, a 15% increase. The LE 2.65 million upgrade was completed in three months. The Japanese Grant Assistance for Grassroots and Human Security Projects donated LE 2 million while the rest was raised by Takatof.
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New Members Real Estate
Consultancy
Hyde Park Properties for Development
METAS Energy
Amin Serag CEO
Arshad Sufi Chairman
Address: 4 Sadat Axis, 5th Settlement New Cairo Tel.: (202) 2247-8800/9700 Fax: (202) 2247-8833
Membership Type Associate Resident
Address: Plot 67, Street 90, Sector 1, Floor 5, Landmark: HSBC Bank, 5th settlement, New Cairo. Tel.: (202) 2929-8021 Website: www.hdp.com.eg
Membership Type Associate Resident
Excellent Communications Dina Abdel Fattah Strategic Consultant & CEO
Address: 82 (Mokarar) Abdel Aziz Fahmy Street, Floor 3, Heliopolis, Cairo Tel.: (202) 2636-2573/ 2636-2307 Membership Type Fax. (202) 2636-2307 Associate Resident Website: www.excellentdandn.com
Affiliate Members Consultancy
Mahmoud El Tabie
CEO, METAS Energy
Hatem Helmy
Communications Consultant MENA, Media Waves
Financial Sector
Akef El Maghraby
Human Resources
Vice Chairman, Banque Misr
International Business Services (IBS) Nihad Katamish Managing Director & Owner
Address: 6/5 G, El Lasilki Street, New Maadi, Cairo. Tel.: (202) 19786 Fax: (202) 2704-4782
Food & Beverages Mohamed Saada
Marketing Director, MARS North Africa and Levant Membership Type Associate Resident
Power
Abdulrahman Assal
Vice Chairman, Globaltronics S.A.E.
Real Estate
Marwan Ziwar
Chief Commercial Officer, Hyde Park Properties for Development
Real Estate Stanly Group
Mohamed Noweir
Moheb Meawad Managing Director Address: 5 Mai Street, behind Four Seasons, San Stefano, Alexandria. Tel.: (203) 582-6266 Fax: (203) 582-7766 Website: www.stanlygroup.com
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Chief Development Officer, Hyde Park Properties for Development
Transportation Membership Type Associate Resident
Sherif Boctor
Assistant Manager, Milmar Shipping Co.
New Members Changes Change in Member’s Title:
Global Projects Services (GPS)
Amr Lamei
Vice Chairman, Sarwa Capital
Change in Company Information: EGAT Group
Address: 71 Syria Street, 10th Floor, Mohandessin, Giza.
Egyptian Gulf Bank
Address: Point 168/3, third Industrial Zone, 6th of October City, Giza. Telephone: (202) 3820-4010/13/119 Fax: (202) 3820-4015
Johnson Controls Egypt, Ltd. Telephone: (202) 2537-0131/2 Fax: (202) 2537-0137
Palamar – Misr
Telephone: (202) 2598-4900
eSpace
696 El-Horreyah Rd., Flat 305, Loran, Alexandria. Telephone: (203) 583-6891 Fax: (203) 583-6894 Sector: Information Technology
Address: Kilo 19, Cairo-Alex Desert Road, City View Compound, Gate 5, Building No. 2, 6th of October City, Giza. Telephone: (202) 3378-8400/700 Fax: (202) 3378-8200
Sarwa Capital
http://sarwa.capital
New Replacements in Member Companies Graham Hurrell
Head of Secondary, New Cairo British International School
Salim Abdil Kadir
Managing Director, Amreyah Cement Company
Ahmed Amin
Chairman, Pyravision for Trading & Consultancy
Bekheet Nazeer CEO, GfK Egypt
Wafik Farag
General Manager, Egypt & Lebanon, Travel Choice
Category: Not-for-Profit Sector: Academic/ Educational/ Research & Development (R&D) Category: Affiliate Sector: Building Materials
Category: General Sector: Consultancy
Category: Multinational Sector: Consultancy Category: Associate Resident Sector: Hospitality/ Tourism/Travel
Hisham Labib
Category: Affiliate Sector: Hospitality/ Tourism/Travel
Karim Wereda
Category: General Sector: Industrial Machinery & Equipment
Hala El Khatib
Category: Not-for-Profit Sector: Non-Governmental Organizations (NGOs)
Director of Sales & Marketing, Sofitel Legend Old Cataract Aswan - Sofitel Luxor Winter Palace
Finance Manager, MEA, Johnson Controls Egypt, Ltd.
Director General, Egyptian Tourism Federation (ETF)
Samer Mansour
General Manager, Aramex International Egypt
Category: Affiliate Sector: Transportation
For any change to contact information, please contact the Membership Services Department at the Chamber’s office Tel: (20-2) 3338-1050, ext. 0016 – Fax: (20-2) 3338-1060 E-mail: membership@amcham.org.eg
Business Monthly – December 2016 I
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Announcements Jobs AMCHAM RECRUITMENT CENTER Code
Vacancies
Company Name
104575 104606 104650 104791 104883 105023
Administration & Facilities Manager General Manager Legal Affairs Manager Senior Project Manager Financial Manager Networks Manager
Ibnsina Pharma CompuGeorge Raya Holding Group E - finance Paradise Capital Holding for Financial Investments S.A.E Zewail City of Science and Technology
For more information about these jobs and others, visit: www.amcham.org.eg/recruitment – e-mail: recruitment@amcham.org.eg, Tel: (20-2) 333 88 220 Ext. 1513 - 1514 Fax: (20-2) 333 73 779
Top Tenders
TOP TENDERS
FROM
TAS
Client
Description
Deadline
Five momarsa for the supply of (a) 10 tons premix for egg layers, (b) 5 tons General Cooperative Society for Agrarian Reform methonyne, 30 tons di calcium phosphate, (d) 350 tons soybean meal & (e) 1,200 tons yellow dent corn. Ein Shams University, the Purchases Dept., The Cashier
Construction of a new building at the Faculty for Nursing.
Beneficiary Sectors
Bid bond Specs fees
Sectors
December 28، 2016
6,000 & 10,000 & 40,000 & 80,000 LE LE 200 each
Agriculture & Food Cooperative Societies
November 16&17, 2016
80,000 LE LE 1,000
Construction Projects Education
Generating Sectors
www.amcham.org.eg/TAS
For further information, contact the Business Information Center at AmCham Egypt Tel: (20-2) 3338-1050 – Direct: (20-2) 3761-9641 • Fax: (20-2) 3338-9896 • E-mail: info@amcham.org.eg Website: www.amcham.org.eg • US Website: www.amcham-egypt.org
U.S. Exhibitions
Listings are now available on our website:www.amcham.org.eg Exhibitions related to the following sectors are scheduled for the upcoming months. Sector
Show Name
Website
Embassy Contact Person
TEL.
Mai Abdelhalim
2797-2146
December Energy
PowerGen
http://www.power-gen.com/ January
ICT
Consumer Electronics Show (CES)
www.ces.tech
Hany Wassef
2797-3422
Construction
World of Concrete
www.worldofconcrete.com
Rania Mekhail
2797-3487
Safety and Security
Shooting Hunting Outdoor Trade show and conference
www.shotsshow.org
Cherine Maher
2797-2688
Healthcare
Arab Health
www.arabhealthonline.com/
Rania Mekhail
2797-3487
Food / Agribusiness
International Production & Processing Expo
www.ippexpo.com
Cherine Maher
2797-2688
Energy
DistribuTECH
www.distributech.com
Mai Abdelhalim
2797-2146
For more information about these exhibitions, please contact: The Commercial Service at the U.S. Embassy Tel: (20-2) 2797-2330/ 40 - E-mail: office.cairo@trade.gov *Please refer to the Commercial Service at the U.S. Embassy for any updates on the exhibitions.
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Business Monthly – December 2016
Classifieds Benefits EGYPTAIR Egyptair is pleased to announce the renewal of the protocol agreement for the year 2016-2017. This agreement entitles all AmCham members and their first degree family members to a special preferential reductions on Egyptair INTERNATIONAL flights ONLY. Up to 30% Discount on IATA rates. Up to 12% Discount over Egyptair’s special fares, depending on the booking class. *This deal is applicable on trips from and to Egypt. *All discounts are not applicable to Jeddah/ Al Madina during Hajj and Omra season during the months of Ragab, Shaaban & Ramadan.
***Discoun ts will be gran ted for AmCham members u pon presen ti ng their AmCham 2016 membership c ard*** Call Center from mobile numbers: 1717 Call Center from land lines numbers: 090070000 Downtown Adly Branch: Tel: (20-2) 2390-6078/ 2392-7680 Zamalek Club Fence Branch: Tel: (20-2) 3347-2027/ 3347-5193/ 3305-1431 Shobra Branch: Tel: (20-2) 2206-9071/3/5 Heliopolis Korba Branch: Tel: (20-2) 2418-3722 Astra Travel Contact: Ms. Hala Tahoun Tel: (20-2) 3749-1469 Ext.137•Mobile: (20-2) 012 2234-8048
NATIONAL TRADINGzzzz COMPANY (APPLIANCE) Appliance is pleased to offer its unique solutions and services to AmCham Member companies as: - Up to 10% discount on Laptops, Mobile and their accessories at Appliance retail branches "Mall of Arabia, City Stars, Cairo Festival City Mall, City Center Alexandria, City Light Alexandria and El Gouna branch". - 20% discount on Digital Signage solution. - 10% discount on GPS services. - 10% discount on security systems. You can check our website for more info.: www.appliance-eg.com, www.appliance-eg.com/b2b
***Discounts will be granted for AmCham members upon presenting their AmCham 2016 membership card*** For more information, please contact: Muhammad Hamdi •Phone Number: (20-2) 2670-6627/ 2670-6320 Mobile: (20-12) 2030-0071 •Email: m.hamdi@appliance-eg.com Mostafa El Gharaz •Mobile: (20-12) 0333-9992 Email: mostafa.elghraz@pins-egy.com
Please visit AmCham Cyberlink on http://www.amcham.org.eg/cyberlink for more information for AmCham benefits
Please visit AmCham Cyberlink on http://www.amcham.org.eg/cyberlink for more information for AmCham benefits
This offer is valid until August 31, 2017
This offer is valid until December 31, 2016
SAFIR HOTEL Safir Hotel Cairo Egypt is pleased to offer a 20% discount to AmCham members on accommodation published rates, and on food & beverages in all restaurants; Palm’s Coffee Shop, Asia Boutique Restaurant, Gazerit Al Dahab (Oriental Restaurant), Blue Pool Café, Chit Chat Café, Corporate Café, excluding alcoholic beverages and service charge and taxes. In addition to a 20% discount on the Health Club and SPA. The offer is not applicable during special promotions and public holidays.
***Discoun ts will be gran ted for AmCham members u pon presen ti ng their AmCham 2016 membership c ard*** For more information, please contact: For room reservations: Abdel Mordi Moustafa•Phone number: (20-2) 3748-2424 / 3748-2828 Mobile: (20-10) 0160-4108 •Email: ressce@safirhotels.com.eg For food and beverages reservations: Ahmed Omar Phone number: (20-2) 3748-2424 / 3748-2828 •Mobile: (20-10) 0518-2457 Email: fbsce@safirhotels.com.eg• Mobile: (20-10) 0518-2457 Please visit AmCham Cyberlink on http://www.amcham.org.eg/cyberlink for more information for AmCham benefits This offer is valid until December 31, 2016
THE INSTITUTE OF MANAGEMENT ACCOUNTANTS (IMA) The Institute of Management Accountants (IMA) is pleased to offer a special 30% discount to AmCham Members on IMA Membership. As a member of the IMA , you can benefit from a wide array of benefits from networking, to access to thought leadership, CPE opportunities and special corporate offers: - Peer Networking. - IMA Middle East Website and Newsletter. - CMA Certification. - Career Resources. - Continuing Education. - Publications. * Please browse the benefits file on AmCham Cyberlink to see the offer details http://www.amcham.org.eg/cyberlink
***Discounts will be granted for AmCham members upon presenting their AmCham 2016 membership card*** For more information, please contact: Renad Hamza Telephone: (20-2) 2461-8534 Email: rhamza@imanet.org Please visit AmCham Cyberlink on http://www.amcham.org.eg/cyberlink for more information for AmCham benefits This offer is valid until December 31, 2016
The BUSINESS MONTHLY Classifieds section is open exclusively to AmCham member companies. Text ads are £E 150 for up to 30 words, £E 5 per additional word. Abbreviations, phone numbers and e-mail addresses count as one word. Display ads are £E 100 per cm in height, per column (max. 20cm in combined total height). Discounts are offered for regular advertisers and repeat bookings. Insertion orders, payment and ad content must be received by the 15th of the month preceding publication. All classified ads subject to editorial approval. For more information, or to place a classified ad, contact Amany Kassem at (20-2) 3338-9890, fax (20-2) 3338-0850, e-mail: akassem@amcham.org.eg
Business Monthly – December 2016 I
69
Advertorial ARAB AFRICAN INTERNATIONAL BANK
NILE RITZ-CARLTON
The Arab African International Bank participated in the 22nd Conference of the Parties in Marrakesh, Morocco, where it showcased its sustainable banking practices. AAIB, which was the only Egyptian financial institution in attendance, presented MOSTADAM, a newly launched platform that is the region’s first certified training program in sustainable finance. MOSTADAM was established to promote capacity building and policy advocacy to drive sustainable practices in the Egyptian banking sector.
The Nile Ritz Carlton hotel is celebrating the festive season with a number of happenings throughout December. There will be carol singers and a lavish Christmas-Day feast. Santa Claus will accompany children to light the Christmas tree in the hotel lobby, and parents can capture the moment by taking pictures of their little ones with Santa. Kids will also have a chance to design their own ornaments to take home to help celebrate the season.
SAMSUNG ELECTRONICS
BARON HOTEL
As a part of its corporate social responsibility program, Samsung Electronics inaugurated its latest diagnostic medical ultrasound imaging (SONO) School at Al Mansoura University, and it’s preparing to launch another SONO School at Kasr El Einy Hospital, Cairo University, Egypt’s largest hospital. The opening of the new SONO schools will follow the successful launch of Samsung’s first and second SONO schools for ultrasound diagnostics, at Ain Shams University Hospital in 2014 and at the Alexandria Regional Center for Women’s Health and Development in 2015.
For the second year, the Baron Hotel in Sahl Hashish hosted Procter & Gamble’s annual tribute to employees, recognizing them for their outstanding performance throughout the year. With 600 meters of beachfront view and top-notch facilities, the Baron Hotel is an ideal spot for such events. It’s built on 100,000 square meters, 80,000 square meters of which is landscape edged with palm trees.
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Business Monthly – December 2016
Advertorial
The Shell Technology Leadership Conference has established a reputation as a leading forum for discussing innovative solutions to address issues affecting our world. This year’s session, “Energy– Water – Food: Innovation and Collaboration for Egypt’s Future Challenges,” was held from Nov. 17 to 20 in Egypt. Centered on the concepts of innovation and collaboration, this year’s conference empowered industry leaders to explore collaborative and unconventional solutions to the critical issues facing Egypt today. “We aren’t talking about things that could be done but things that have already been done,” noted Khaled Habib, the conference sessions moderator. One example is Shell Egypt’s annual Eco-Marathon competition, in which 40 students from Egypt’s top universities designed and manufactured their own vehicles, with the aim of
traveling as far as possible on a single liter of gasoline. This year, the Cairo University delegation came in in eighth place out of 45 competitors – a testament to the extraordinary capabilities of Egyptian youth in collaboration and innovation. Andrew Hepher, vice president of downstream global commercial technology at Shell Global Solutions, stressed the company’s theme of Powering Progress Together to provide cleaner energy solutions as the global population continues to grow. “Our population is expected to expand from seven to nine billion by the year 2050, with urbanization projected to expand at a rate equal to one new Cairo-sized city every two months for the next 40 years,” said Hepher. This will require everyone to work together to achieve common goals.
XEROX
CROCKFORDS
Xerox Egypt sponsored the 20th annual Cairo ICT conference held Nov. 20-30 at the Cairo International Conference Center. The firm believes in the importance of such conferences to promote the local ICT sector and attract foreign direct investment. At the event, Xerox focused on promoting printers that meet the needs of small businesses in terms of cost as well as efficiency, which are vital considerations for SMEs with limited resources. The company also showcased specialized devices for the health care, banking, telecom and government sectors.
The world-renowned Malaysian-based Genting Group has teamed up with Egypt’s state-owned Misr Hotels to open the first Crockfords Club outside the UK at The Nile Ritz-Carlton. Genting has more than 50 years of international expertise in opening and operating similar casino ventures in various parts of the world. The original Crockfords was a private members’ only gaming club established in London in 1828 by William Crockford.
Business Monthly – December 2016 I
71
Media Lite
A Glance At The Press Eygpt hikes customs on luxury goods
“You’re no patriot. You’re still using deodorant.”
Al-Masry Al-Youm, Dec. 5 Media Lite is a satirical review of items published in the local and international press. All opinions and allegations made in them belong solely to the original publications and no attempt has been made to ascertain their veracity.
WHAT A CROCK The latest innovative scheme to boost exports and solve Egypt’s fiscal woes is selling Nile crocodiles on the international market. The plan came from, ironically, environment minister Khaled Fahmy, who reckons crocodile skins could fetch some $400 each from traders who’d make them into shoes or purses, and with an estimated 3,000 of the giant reptiles in Lake Nasser alone—well, do the math. The minister’s announcement follows a recent decision by the Convention on International Trade in Endangered Species of Wild Fauna and Flora to allow the global trade of crocodiles, albeit with restrictions. Fahmy is confident that the rest of the world will snap up Egypt’s crocodiles. He even suggested bringing in reptile experts from sub-Saharan Africa and building commercial breeding aquariums. Various media, Nov. 29
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RUNNING ON EMPTY Following the latest hike in petrol prices, everyone is looking for creative ways to conserve fuel. But first prize surely goes to a mechanic from Ismailia who recently unveiled a tuk-tuk that, according to him, runs on pure water. Mahmoud Abdelfattah showed off his new potentially world-changing wheels to a local film crew, explaining that the process works by extracting hydrogen from water and burning it. As if saving billions of dollars and putting a major dent in global warming wouldn’t be enough, he added that his water-powered tuk-tuk goes three-times faster than the standard model—meaning it can sail down the highway at around 90 miles an hour— though the footage broadcast by local journalists only showed Abdelfattah poodling up and down the Corniche at a parking-lot speeds. Naturally, he’s received offers from abroad, he said, but the patriotic inventor said he wanted
Business Monthly – December 2016
fellow Egyptians to get the first crack at his miracle invention. Youm 7, Nov. 8
KEEP SMILING
As Egyptian consumers are being slammed with skyrocketing inflation, the Consumer Protection Agency announced that shops that don’t raise prices will be rewarded with smiley face posters to hang on their walls. The idea is to encourage businesses not to raise prices, even in the wake of rising costs connected to the falling pound and fuel price hikes, among other things, by steering people to them, explained CPA director Atef Yacoub. Acknowledging economic realities, he added that there might be some leeway for shops that have only hiked prices a little bit, and businesses that don’t raise the price of some products would be eligible for smiley face stickers on just those items. Youm7, Nov. 24
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