B monthly march 17

w w w. a m c h a m . o r g . e g / b m o n t h l y

NOT FOR SALE

MARCH 2017

▲ ▲ ▲ ▲ ▲ ▲

SECOND CHANCES

RIVER OF DREAMS THE FUTURE OF THE PAST

TECH SUPPORT The future of AI in Egypt

The new E-Class.

Masterpiece of Intelligence.

Visit your nearest Mercedes-Benz authorized dealership or call 16362

MYSTERIOUS, EXOTIC AND FUN TOO... TORII’S RESTYLED JAPANESE MENU BRINGS A MODERN TWIST. ‘Japanese Tacos’ and ‘Torii bites’ with tuna, salmon and scallops... ‘sharing’ dishes with US Wagyu beef , shrimps and prawns... soups, salads, sauces, spices and herbs.

Take front row seats for the shimmering blades and flaring flames of teppanyaki with sea bass, tenderloin beef and lobster tail.

Eat, talk, share, relax... have fun!

ASI AN FUSI ON...

SHARE DELI CI OUSNESS AT TOR I I

16 SARAY EL GEZIRA ST., PO BOX 33 ZAMALEK, CAIRO 11211, EGYPT. T: 00. 202.27.28.3000 CAIROMARRIOTTHOTEL.COM ARABIC.MARRIOTT.COM

MARCH 2017 VOLUME 34

28

|

ISSUE 3

Cover Story:

With a little help from my friends Cairo-based Elves seeks to take the country into the age of artificial intelligence—and help you get your laundry done.

Cover Design: Nessim N. Hanna

16

Inside 12

Editor’s Note

14

Viewpoint

The Newsroom 16

In Brief The news in a nutshell

20

Region Notes News from the Middle East

© 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.

8

I

Business Monthly – March 2017

MARCH 2017 VOLUME 34

|

42

22

44

Market Watch 34

Stock Analysis Why you should have sold in January

35

Capital Markets A glance at stocks and bonds

37

Money & Banking Forex and deposits

38

Key Indicators The economy at a glance

39

Egypt-U.S. Trade Imports and exports

In Depth 22

25

10 I

Fears about dam don’t hold water Africa’s largest hydropower project could actually help Egypt Struggling businesses push bankruptcy law Giving local investors a second chance

Business Monthly – March 2017

ISSUE 3

40

Executive Life 42

Dining Out Suburban south of the border

44

Heritage The fourth pyramid

The Chamber

Corporate Clinic

48

Events

Mind the gap Addressing global income inequality

50

Member News

51

New Members

53

Classifieds

56

Media Lite An irreverent glance at the press

Editor’s Note

STRANGER THAN FICTION

A

nyone who was on social media in the last six months probably saw the headline about the beer mogul who willed a million dollars to every resident of his hometown in Spain, or the one about the Florida man who unwittingly married his granddaughter. That neither of these stories were true didn’t keep them from becoming two of the most widely circulated articles of 2016.

There’s nothing new, of course, about stretching the truth for political or financial gain.

Decades before the World Wide Web, American supermarket tabloids profited handsomely from cover stories like “Man gives birth to healthy baby boy” and “Abraham Lincoln was a woman.” Propaganda, in use since ancient times, took off exponentially in the 20th century with the development of mass communication. It was widely used in both World Wars, taking the form of Nazi race-baiting as well as Donald Duck cartoons caricaturing Hitler. But last year, a surreal American presidential election featuring the an unpredictable candidate took place during an age in which Facebook has replaced traditional media and algorithms have taken the place of human beings. Young internet nerds in Macedonia quickly learned that headlines like “Pope backs Trump” (he didn’t) and “Hillary sold weapons to ISIS” (she didn’t) could make them a fortune in perclick advertising. A December study published by Stanford University found that a large percentage of students, from middle school through university-aged youth, couldn’t tell the difference between a sponsored online ad and a legitimate news story.

Just as “fake news” emerged as the latest dystopian sc ourge of the digital age, however, we seem to have lost track of what it is. Things got especially confusing after the star of much of last year’s fictional journalism, U.S. President Donald Trump, decided to use the term as a weapon in his ongoing war against mainstream news outlets.

Following reports of record-low approval ratings for a newly elected president, he issued a blanket Tweet declaring that “any negative polls are fake news.” Before long, leaders around the world had jumped on the bandwagon, dismissing all manner of unflattering press coverage as “fake.” Chinese officials used the phrase to decry reports that government security agents hhad tortured a human rights lawyer. Even Syrian president Bashar al-Assad agreed that the problem has gotten out of control. “We’re living in a fake news era,” he declared in February, dismissing an Amnesty International report accusing his government of committing atrocities against thousands of prisoners in the country’s ongoing civil war.

Watching how fast the very meaning of “fake news” became fake shows just how slippery facts are in the social media age. In a 30-second clip aired during last month’s Oscars, The New York Times—which Trump has called “dishonest”—concludes: “The truth is hard to find, the truth is hard to know, the truth is more important now than ever.” Ain’t it the truth.

Director of Publications & Research Khaled F. Sewelam Editor-in-Chief Rachel Scheier Contributing Editors Kate Durham Tamer Hafez Staff Writer Edmund Bower Senior Art Director Nessim N. Hanna Graphic Designer Emy Emile Advertising & Business Development Director Amany Kassem Advertising Coordinator Nada Auf Photographers Said Abdelmessih Kareem El Sharnoby Omar Abdel Rahman Yousif 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

12

I

Business Monthly – March 2017

Viewpoint

SLOW JUSTICE = INJUSTICE

I

cannot begin to imagine how it must feel to be punished for a crime you did not commit! Especially if you are certain that your accusers know you are innocent and were acting in good faith as chairman of a corporation!

There is a huge difference between being considered innocent until proven guilty and being treated as guilty until proven innocent. As far as the media is concerned, an accusation is news, while an exoneration is far from being interesting; nobody wants to know that there was no wrong doing! Who cares? It is not sensational enough! The day one is accused, all the headlines scream bloody murder, however when the case is closed, it is not mentioned anywhere.

A few days ago, a leading figure of the Egyptian business society was cleared after going through five years of emotional hell. As the chairman of a major corporation, he had been sentenced to three years in jail for an alleged corporate mistake!

To avoid facing an even greater injustice, he stayed out of the country, his family had to shuttle back and forth to see him, his career was seriously damaged, and although his colleagues and those in the know were certain that the accusation was ill founded, the society at large only read the papers without understanding that chairmen can be the victims of a company action that might have taken place before their appointment, or considered guilty of a charge that is unfounded or could have never happened.

Who can repay victims of injustice for the lost years, the horrid hardship of unheard outcries and the emotional oppression? Someone somewhere must be held accountable even if the damage will never be undone. There must be an equitable social recognition of innocence and an

14

I

Business Monthly – March 2017

honest public apology to make good for the wounded image and the tarnished reputation.

If the laws continue to allow the justice apparatus to drag perfectly decent, law-abiding individuals through the hardships of injustice, competent executives will refrain from contributing, investors will shy away and Egypt will have to live with the second and third choices, those who are hungry enough to accept the uncalculated risks that come with the jobs.

The investment law was amended in 2015 by adding Article 7, which stipulates that chairpersons of legal entities can only be penalized if their knowledge of the crime is established. I fail to understand which is worse, being a chairman who does not know what is going on in his company, or acknowledging that you knew and go to jail! Obviously, this clause still leaves a lot of room for interpretation. Unless the laws protecting civil servants are promulgated in unequivocal, transparent language, and until chairmen and productive individuals are taken out of the fear sphere and incentivized to excel, I do not expect excellence to be part of the performance circle. We will continue to do what we can with what we have and will survive by putting out fires and managing crises whenever and however possible.

Fear is the main driver behind inefficiency and lack of creativity, while peace of mind stemming from legal protection is the true engine of excellence and growth. So as long as we continue to deal with human beings, the legislators have to ascertain that good performance is rewarded and injustice is avoided.

As an Egyptian, I apologize to the great people who were penalized while honestly serving their companies and their country.

A NIS A. A CLIMANDOS President, AmCham Egypt

Senseless

55% of office space is empty. Right now.

Regus is Workspace as a Service. Only the space you need. Anywhere. On demand.

So you can streamline operations. Reduce risk. Preserve capital. And be more agile.

Download our app, call 02 2461 85 84, or visit www.egypt.regus.com

Offices | Co-working | Meeting rooms Š2017. All rights reserved.

Inflation hits record

CBE holds interest rates steady

Despite sky-high inflation, Egypt’s Central Bank once again held interest rates steady following a Feb. 16 meeting of the Monetary Policy Committee while acknowledging that economic reforms like the floatation of the pound are fueling price hikes. Attributing the accelerating cost of living in part to “relatively higher regular monthly dynamics” and increased import taxes at the end of 2016, the MPC predicted that annual inflation would drop after “transitory cost-push efforts subside.”

The Committee also cited a decline in GDP growth to 3.4 percent in the first quarter of the 2016/17 fiscal year after averaging 4.3 percent over the previous two. Overall, the MPC judged that

16

I

Business Monthly – March 2017

“given the balance of risks,” the CBE’s current rates—set in November at 14.75 percent for overnight deposits, 15.75 percent for overnight loans and 15.25 percent for its main operations—were “currently appropriate.”

Suez Canal revenues remain weak

Suez Canal tolls declined in January, totaling $395.2 million compared to $411.8 in the same month a year earlier. According to calculations by Reuters, full-year revenue for 2016 reached just $5 billion compared to $5.175 billion in 2015. The decline is attributed to a general slowdown in global trade as well as the relative strength of the U.S. dollar. Canal tolls are calculated according to a basket of

KAREEM EL SHARNOBY

Egypt’s annual core inflation soared to 30.86 percent in January, the highest level recorded in more than a decade. The core rate, which does not include volatile goods like fresh produce, outstripped even the headline rate, which rose by 28.14 percent year-on-year, according to Central Bank of Egypt figures. Meanwhile, driven by food and beverage prices, January’s monthly core rate rose by 5 percent, compared to 4.35 percent in December, while the monthly headline rate accelerated to 4.07 percent, up from 3.13 percent the month before. Prices have risen steeply since November, when the Central Bank of Egypt allowed the pound to float freely against the dollar and the government increased the price of subsidized energy. Soaring inflation has decreased purchasing power and threatens to suppress the country’s overall economic growth. Following the release of the most recent numbers, however, finance minister Amr El-Garhy told Bloomberg Television that he expects prices to peak by the end of the first quarter. “It is all resulting from supply shocks rather than demand-driven kind of inflation,” he said.

global currencies. In 2015, Egypt completed an $8-billion canal expansion project, part of broader plans featuring a Suez Canal investment zone that officials predicted would increase annual canal revenue to more than $13 billion by 2023. So far, however, the promised surge in tolls and traffic has yet to materialize.

Business conditions worsen again

The operating environment in Egypt declined for the 16th month in a row in January, according to representatives of the non-oil private sector surveyed for the Emirates NBD Purchasing Managers’ Index. The headline PMI improved to 43.3 in January compared to 42.8 in

December, but any number below 50 indicates a decline in business conditions during the month.

January’s figures reflect lower output and new orders—a decline that respondents attributed to inflation and the ongoing economic downturn in Egypt as well as rising security concerns elsewhere in the region.

As a result, companies reported the most marked level of job shedding in the history of the survey.

“January’s survey provides little evidence that an economic recovery is yet underway at the start of 2017,” said Jean-Paul Pigat, senior economist at Emirates NBD, in a press statement. “It is, however, encouraging that the new ‘Future Output Index’ of the PMI suggests that firms have become increasingly optimistic on the economic outlook following November’s devaluation of the EGP.”

Businesses struggle to repay pre-float loans

By late February, the Egyptian pound showed signs of a rebound, trading at around LE 16 per dollar after weakening to a low of almost LE 20 per dollar following the float in November. For importers who opened dollar-denominated credit lines before that—when the official value of the pound stood at LE 8.88 per dollar—it was a positive development but not nearly enough.

Many small firms face closure as the Egyptian pound-value of their debt stands at nearly double what is was when they borrowed. On Feb. 21, the Central Bank reached an agreement with Egyptian investors to settle those credit lines. Reuters reports that the deal will allow around 570 firms to repay their debts in pounds over two years at a 12 percent interest rate. Some importers are still unhappy with the arrangement, claiming they bought and sold imported goods at the pre-float rate and lack the resources to repay at the current exchange rate, even over a two-year time frame.

BUSINESS MONTHLY ARCHIVES

In Brief

TOURIST VISAS ARE SET TO DOUBLE TO $60.

Gov't to hike tourist visa fees

Tourists planning to visit Egypt will see visa fees more than double this year, if a plan proposed by the foreign ministry is enacted. On Feb. 24, airport officials told state-owned Ahram Online that the cost of single entry tourist visas would increase from $25 to $60 as of March 1. Following objections from tourist operators—who argue that the move came too abruptly and that raising the visa prices could further slow an industry recovery, especially for cost-sensitive visitors to the Red Sea—the tourism ministry announced that the increase would be delayed until July 1. Egypt’s tourist industry peaked in 2010, with revenues of around $12.5 billion, but dropped sharply in the wake of the 2011 revolution. Battered by years of political turmoil and a series of highprofile incidents in 2015 including the fatal crash of a passenger jet in the Sinai and the shooting by security forces of 12 tourists and guides, the sector has yet to recover. In 2015, the most recent full year for which revenue statistics are publicly available, tourism brought in just $6.1 billion. In

the first nine months of 2016, the World Tourism Organization reported that receipts were down by more than 68 percent year-on-year. Shortly before the planned change in visa policy was made public, some operators had reported encouraging signs. On Feb. 9, British tour operator Thomas Cook reported that demand for Egypt was “strengthening,” even though the United Kingdom has maintained a warning against air travel to Sharm el-Sheikh.

Unemployment inches down

Joblessness eased slightly to 12.4 percent in the fourth quarter of 2016, according to state-statistics agency CAPMAS. By contrast, official figures put unemployment at 12.6 percent in the previous quarter and 12.8 percent in the fourth quarter of 2015. At 25.3 percent, female unemployment remains higher than male unemployment, recorded at 8.5 percent.

Around 79 percent of the jobless are between 15 and 29, while 88.4 percent of them are educated, notes Reuters-affiliated Aswat Masreya. Official statistics are based on the number of people seeking employment through official channels like the ministry of manpower, a

Business Monthly – March 2017

I

17

In Brief

STREET SENSE What could a robot help you with?

I would have it do chores for me like go to the Mogamma, renew my driver’s license and pay the rent. I work a lot, and often I have to take a day off in order to get these kinds of things done. I know my wife would love to have one to do the weekly housecleaning and to help out when we have guests.

Ahmed Salah, 37, IT projects manager

I would have my robot monitor my subordinates to make sure they are doing their jobs. Also, it could listen to customer calls for quality assurance. It would also be nice if it would drive me to work and back, because traffic is a killer.

Tamer Gamal, 52, call center manager I have two kiosks, one in Mohandiseen and the other in Garden City. I’d want my robot to work in one of them, because my big challenge is finding reliable, honest employees—I can't be in two places at once.

Hany Mohamed, 32, kiosk owner I’d have the robot do everything except feed me. I am an old woman, I live alone and my movement is limited. I don't trust maids because they’ve stolen from me in the past. My robot could cook for me, do my laundry, clean the house and buy supplies. And on the rare occasion when I want to go out, it could drive.

Gamila Salem, 82, retired teacher I’d like my robot to get a job and help me make ends meet.

I don’t know what it could do—maybe be a driver for a rich person. I work two jobs and barely earn enough to support my wife and three kids. There aren’t enough hours in the day for me to work a third job, so my robot could get one. Or I’d sell it and use the money to fix things around the house.

Yassin Taher, 45, security guard If I had a robot, I’d have it go to work in my place—and I’d have another robot who could travel with me and pack and unpack my stuff. I love hiking, but I hate carrying all the equipment. Having a robot to do that would be excellent. I wouldn’t have to worry about feeding it or it getting tired or injured in the middle of a hike. It would also be free whenever I wanted it.

Marwa Hassanein, 21, unemployed I think the best thing about having a robot would be that I could send it to take care of government paperwork, which I hate. I would also teach it to drive my taxi, so I could find a desk job and make more money while the robot was also bringing in income. But the robot needs to be really small, because I don’t have any space in my house to store it.

Taher Abdalla, 47, taxi driver

COMPILED BY TAMER HAFEZ

18

I

Business Monthly – March 2017

KAREEM EL SHARNOBY

I would mainly have my robot do housework—clean, do the laundry, make the beds, do the dishes, clean the fridge and take out the trash. I like shopping, so I wouldn’t mind doing that part myself, but I’d like some help carrying the bags up the stairs, and it would be nice to be reminded when we were running low on things.

Rehab Ramy, 42, housewife

THE CHEAP POUND HAS GIVEN AGRICULTURAL EXPORTS A BOOST.

methodology critics say drastically understates the true extent of joblessness in Egypt. Analysts say that in order to dramatically reduce unemployment, Egypt needs to maintain annual GDP growth rates of around 6-7 percent.

exports will increase in 2017, thanks to the cheap pound and peaked interest in the fiber following a recent high-profile scandal involving the sale of falsely-labeled Egyptian cotton sheets.

Agricultural exports on the rise

ENI, BP plan massive Egypt investments

Following the rapid decline in the value of the Egyptian pound since it was floated in November, Egypt’s agricultural exporters say their products have started to become more attractive to foreign buyers. Abdel Hamid al-Demerdash, head of Egypt’s Agriculture Export Council, told Reuters that he expects the 2017 value of exported fruits, vegetables and legumes to increase by 15 percent over last year’s $2.2 billion. The main challenge, traders say, will be hiking production by enough to keep pace with demand. In related news, state statistics agency CAPMAS reported a 63-percent increase in cotton exports in the first quarter of the agricultural year, thanks to leftover cotton stock from the year before combined with a decline in domestic consumption. However, analysts predict that Egypt’s cotton output and

Italy’s Eni and UK-based BP are investing more in Egypt than anywhere else in the world, reports Bloomberg. Both companies have stakes in the Zohr field, a giant offshore natural-gas deposit expected to begin production by the end of this year. According to Eni CEO Claudio Descalzi, the company plans to invest $10 billion in Egypt over the next five years. Meanwhile, BP’s chief executive Bob Dudley confirmed that Egypt would once again be the oil and gas major’s top investment recipient in 2016-17. In addition to its involvement in the Zohr project, BP also plans to start producing at its West Nile Delta project this spring. In related news, Egyptian officials told Bloomberg that Shell will start drilling at the West Delta Deep Marine phase 9B gas field in the second quarter of this year, after the project was suspended due to delayed payments from the Egyptian government. ■

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

Map intended for illustrative purposes only and may not accurately depict national boundaries or disputed territories.

SOUTH SUDAN SUDAN

Atlantic Ocean

■ Bahrain, Saudi Arabia approve plans for GCC-wide VAT A much-delayed plan to implement a unified value-added tax framework across the Gulf Cooperation Council finally looks to be moving forward.

On Feb. 1, Bahrain announced that it had ratified the council-wide treaty, which is expected to lead to the launch of a 5-percent base VAT being introduced in early 2018.

Bahrain’s agreement followed approval of the treaty by Saudi Arabia’s Cabinet on Jan. 30. It establishes a framework for national tax laws, beyond which each GCC member will be allowed to establish its own policies. While some analysts are skeptical about the likelihood of a successful simultaneous rollout across the Gulf, the plan is in line with a broader trend: As oil and gas revenue has become an increasingly unreliable source of funds in the wake of low oil prices, governments in the Arab Gulf are seeking to diversify their economies.

20

I

Business Monthly – March 2017

■ Dubai to introduce flying cars Already home to underwater dining and indoor skydiving, Dubai plans to offer a totally new cutting-edge experience—flying cars. On Feb. 13, the UAE’s Roads and Transport Authority announced plans to begin operating the self-driving autonomous flying automobiles, which were developed in collaboration with the Chinese firm Ehang.

The RTA envisions a summer start date for the vehicles, which have a maximum cruising height of 3,000 feet and can maintain a maximum speed of 160 kilometers-per-hour for up to 30 minutes, officials told Emirates 24/7 news. Successful tests have already been carried out, and a ground control center has been established to monitor the flights.

The introduction of these airborne robot-cars is part of a broader plan to reduce gridlock in Dubai and increase the percentage of driverless trips to 25 percent of all individual travel in the emirate.

■ Famine looms as crisis Indiandeepens Ocean in South Sudan With years of conflict and economic troubles showing no signs of abating, the world’s youngest country now faces famine or the threat of famine in several regions. A dysfunctional economy, high food prices, low agricultural production and an ongoing civil war have resulted in 4.9 million people facing starvation, reports Agence France Presse. “The problem is manmade,” said Eugene Owusu, the United Nation’s humanitarian coordinator for South Sudan. “The underlining drivers have been there for some time, and we have all known that we have a major food crisis.” When South Sudan broke away from Sudan in 2011, it retained large oil reserves but none of the infrastructure needed to connect to a global market. Then, in 2013, war broke out after President Salva Kiir accused his former deputy of plotting a coup. A peace deal was reached in August 2015 but unraveled less than a year later. ■

BBQ

NATURAL RESOURCES

FEARS ABOUT DAM DON’T HOLD WATER

E

BY EDMUND BOWER

ver since Ethiopia announced the construction of a 6,000megawatt dam on the Blue Nile, Egyptians have been wringing their hands. Officials predicted it could spur dire sudden water shortages and massive crop failures. In their attempts to dissuade Ethiopia from constructing its Grand Renaissance Dam—which the latter country argues it desperately needs for electricity to power its fastgrowing economy—Egyptian officials

22 I

Business Monthly – March 2017

have resorted to everything from diplomacy and good-will soccer matches to thinly veiled military threats. Local authorities launched complaints against the dam with the United Nations and the African Union, warning that Ethiopia’s “aggressive escalation” in going ahead with the dam could reduce Egypt’s precious few acres of farmland by a fourth. Refugee workers in Cairo even reported an uptick in dam-related acts of resentment directed at Ethiopian immigrants.

The scuffle between the two nations over the dam reached a low point in

2013, when Egyptian officials were unwittingly broadcast on live television suggesting various outlandish plots to pressure Ethiopia to halt construction of the project, including espionage and backing rebels. In a speech in June of that year, President Mohamed Morsi promised to “defend each drop of Nile water with our blood.” The Ethiopians were unmoved. A spokesman for Prime Minister Hailemariam Desalegn told The Guardian: “Nothing is going to stop the Renaissance Dam,” adding that “None of the concerns the Egyptian politicians are making are

In Depth

supported by science. Some of them border on what I would characterise as fortune-telling.”

We’ll soon find out whether or not Egypt’s fears about the dam were overblown. In September, the so-called GERD is expected to be finished, on schedule, though it will be several more years before it provides Egypt’s developing upstream neighbor with the energy it argues it desperately needs to help alleviate poverty. The dam will be the biggest hydropower plant in Africa; it’s expected to triple Ethiopia’s energy capacity and enable it to export electricity to boot, putting an end to the frequent daily blackouts that are common in the capital city of Addis Ababa to say nothing of the countryside, where much of the population has no access to the central grid. The dam is a key part of Ethiopia’s strategy to become a middle-income country by 2025, a goal it appears well on its way to meeting with annual growth of around 10 percent, making it one of the world’s fastest-growing economies.

Egypt and Sudan—which also initially opposed the dam—are still negotiating with Ethiopia on certain sticking points. President Abdel Fattah el-Sisi has struck a much more conciliatory stance on the dam than his predecessor; he and Prime Minister Hailemariam issued a statement stressing their “commitment to the prevailing cooperative spirit” after meeting on the sidelines of the African Union Summit in Addis Ababa in January. While the outcome of the talks remains to be seen, experts say that the dam is likely to have little impact on Egypt’s longterm water supply.

Still, the country’s hysterical response to a megaproject being constructed on a body of water that represents Egypt’s lifeblood is understandable. In addition to being a key part of its national identity and history, the Nile provides Egypt with 97 percent of its water, and at least 60 percent of it flows from the Blue Nile, the tributary that runs through Ethiopia. Egypt is already considered a water-impoverished country, meaning it lacks the

resources to provide drinking water, crops and fibers for its people. From around 7 million at the time of the Roman conquest, Egypt’s population has skyrocketed to more than 90 million people today, all drinking from the same fixed pool of water as their ancestors did several millennia ago. Food imports—Egypt is the world’s largest grain importer—eat up much of the country’s depleted foreign currency reserves.

“FOR THOUSANDS OF YEARS, THE COUNTRY HAS DEPENDED ON THE NILE; ANYTHING YOU DO ON THAT RIVER SYSTEM IS PERCEIVED AS A THREAT.”

“For thousands of years, the country has depended on the Nile; anything you do on that river system is perceived as a threat,” says Jakob Granit, former director of the Stockholm Environment Institute and an expert on hydropower.

However, the Renaissance Dam’s very purpose makes it unlikely to affect water flow into Egypt, argues Granit.

Unlike the Aswan Dam, which was completed in 1970 to control Nile flood waters for irrigation, the Renaissance Dam is being built to produce hydroelectricity from the reservoir it creates, a process that doesn’t consume any water once it’s filled. Indeed, the dam is located 20 kilometers from the Sudanese border, in an area with no agriculture to speak of. In order to produce electricity, in fact, the river must continue to flow through the dam’s turbines—and hence downstream to Egypt. “The risk that it will reduce the water flow into Egypt is small,” says Granit.

What could matter to Egypt is how quickly Ethiopia fills the reservoir once

the dam is built, a point that is still being negotiated between the two countries along with Sudan, says Emily Hawthorne, an analyst with Stratfor, a U.S.-based geopolitics consultancy.

She explains that the faster the reservoir is filled, the higher the risk that Egypt suffers potential adverse effects from a suddenly reduced water supply.

Hawthorne says filling the dam is likely to take anywhere from two to seven years. Technically, the reservoir could be filled even faster than that, she adds, which could amount to “a nightmare for Egypt.”

Syria and Iraq faced just such a scenario in 1990, after Turkey began filling the reservoir attached to the newly completed 169-meter high Ataturk Dam with water from the Euphrates, the river that travels south through its Arab neighbors, functioning as a key water source for those downstream countries. Giving them just one year’s notice, Turkey cut the flow of the river by the 75 percent, spurring a feud with the two countries, particularly Iraq, which relies on the river for almost half of its water and threatened to bomb the dam, causing Turkey to mobilize troops on its southern border. In the end, though, Iraq’s posturing had little effect, and Turkey eventually blocked the Euphrates completely for several months to fill the remainder of the reservoir before letting the river resume its natural course.

But it’s unlikely that Ethiopia would want to spark such a conflict with its upstream neighbors, particularly Egypt, which has Africa’s strongest military and where access to the Nile waters is literally a life or death issue.

Egypt’s annual share of the Nile waters is enshrined in a 1959 treaty brokered

by Great Britain that granted Egypt and Sudan the rights to the vast majority of the river’s approximately 80 billion cubic meters, with 55.5 billion cubic meters and 18.5 billion cubic meters, respectively. That leaves the other nine Nile Basin countries (now including South Sudan), to make do with other water sources such as seasonal rainfall and groundwater. It’s

Business Monthly – March 2017

I

23

SOHA EL GAVBI

In Depth

easy to understand why Ethiopia and its sub-Saharan neighbors have long resented this colonial-era deal. The geopolitical dynamics around the dam reflect Ethiopia’s rising economic status—while Egypt’s international sway has diminished in recent years.

Nonetheless, Egypt has what Hawthorne describes as “squatter’s rights” over the Nile, simply because the river is virtually its sole water source. “They can’t undo the dependency of 90 million plus people,” she says. In short, blocking Egypt’s access to Nile waters would amount to disastrous politics and PR. On the other hand, Egypt—suffering from a chronic energy shortage— could stand to benefit from having a mammoth new power source two countries away. The 6,000-megawatt finished dam is expected to more than quadruple Ethiopia’s current electricity supply—ultimately producing more power than the country will know what to do with, according to Richard Tutweiler, the director of the Research

24 I

Business Monthly – March 2017

Institute for a Sustainable Environment at The American University in Cairo.

The rest will be sold to neighboring countries. Sudan and Kenya have said they plan to buy 300 megawatts and 400 megawatts of electricity a month, respectively. Egypt—which consumes more than 20 times as much power as Ethiopia despite having a slightly smaller population—is another obvious potential customer for the soon-tobe newly minted power-exporting African nation, though it could take years to build the power lines to transmit electricity 2,000 kilometers to North Africa.

Even if Ethiopia opts to fill the dam faster than Egypt might like, it could ride out the storm by relying on the water in the Aswan Dam, says Tutweiler. Lake Nasser, its reservoir, holds 130 million cubic meters of water, more than double the annual flow of the Nile through the Aswan Dam and twice as much as the Ethiopians will need to fill the reservoir. The Aswan Dam was built in the

1960s in part to guard against water shortages. “Egypt got through a drought in the 1980s while people were starving to death in Ethiopia,” says Tutweiler, referring to poor rains between 1982 and 1985 that contributed to an Ethiopian famine that killed some 400,000 people.

The one big drawback of Lake Nasser being your single major reservoir is that its location amid the desert of Upper Egypt means that it loses an astonishing amount of water to evaporation. Somewhere between 10 and 16 cubic kilometers of water from the Aswan Dam disappears into the air every year—as much water as it takes to fill Loch Ness, Britain’s largest lake, twice over. If Egypt and its Horn-ofAfrican neighbor managed to forge a cooperative spirit, some experts suggest, Egypt could rely less on Lake Nasser and more on storing water in a cooler, wetter area in Ethiopia with a much lower rate of evaporation. Says Tutweiler: “It would be like discovering a whole new source of water.” ■

STRUGGLING BUSINESSES PUSH BANKRUPTCY LAW

BY TAMER HAFEZ

B

ack in 1980, Salah (not his real name) bought a small furniture factory in 6 October City, where he also ran a showroom where he sold tables and chairs. In the following decades, as business thrived, he added production lines and nearly doubled his workforce to 500 people. In recent years, however, cheap, globally mass-produced furniture imported from countries like China and Sweden became increasingly popular in Egypt, and local manufacturers like Salah went under in droves.

By 2009, Salah was struggling to repay a total balance of LE 43 million plus interest in bank loans he had taken out back in the mid-1990s, when business was booming. One day in late

December, he received a 6 a.m. phone call from his lawyer instructing him to report to the police. “I knew my finances were in a mess,” says Salah, but he insisted that in the past, the banks had always been accommodating about accepting partial or delayed payments, so long as he kept them in the loop. So he was shocked to learn that one of his creditors had filed a formal complaint that he’d defaulted on his loan and called in the balance—LE 20 million. Without the funds to comply, Salah was ordered to spend the night in a temporary holding cell while his wife scrambled to raise the money for his LE 250,000 bail.

And that was only the beginning of Salah’s ordeal. The cops padlocked the

KAREEM EL SHARNOBY

AFTER THE FLOAT

doors to his factory and froze his bank accounts. He was told that his assets would be auctioned off, with the proceeds going to his creditors. Nor had Salah seen the last of prison. Between 2010 and 2015, the businessman was imprisoned four more times, for twoweek stints, and he says his family has paid nearly a million pounds in total to bail him out of jail. Six years later, at 63, he is still in the process of negotiating a settlement with the banks, while his factory remains shuttered and all his assets frozen. “Thankfully, my wife has her own business,” he says, “and she has been supporting the family.”

His story is not unusual. Without a specific law governing bankruptcy, Egyptian businesses that run aground

Business Monthly – March 2017

I

25

In Depth

financially have long had no choice other than to be evaluated by the courts on a case-by-case basis, often facing the specter of imprisonment for unpaid debts. In an attempt to remove this hefty barrier to risk-taking and investment, Egypt's Cabinet on Jan. 4 approved a draft law regulating bankruptcy, the country’s first such legislation. According to a Cabinet statement, the law will “deal with cases of faltering companies and merchants to fulfill their obligations.” While details of the draft law, now before parliament, have not been published, the Cabinet said the law is “within international standards” and “ensures the rights of all parties” including creditors, debtors and employees.

Crucially, proponents say, the legislation would end jail time for debtors and offer options in which distressed businesses can stay open. “This new bankruptcy law will work in tandem with the new investment law,” to attract foreign investors back to Egypt and help revive the economy, said Minister of Investment Dalia Khorshid, who has since been replaced by Sahar Nasr.

The issue has come to the fore as local businesses, already struggling after five years of economic crisis following the 2011 revolution, are coping with the additional hit of the Central Bank’s float of the Egyptian pound in November, a move the government and international agencies like the International Monetary Fund agree was a bitter-but-necessary economic reform measure. Meanwhile, the float has put the survival of many local businesses in jeopardy. In particular, companies that took on dollar-denominated debts in recent years in order to pay for imported supplies and equipment when the CBE held the exchange rate below LE 8.8 are now facing skyrocketing repayment costs, with greenbacks soaring to more than LE 19 in recent months.

(The rate was around LE 16 at press time.)

Importers in particular are teetering at the brink of insolvency.

In December, nine local investors associations took out a full-page ad in state-run Al Ahram calling on

26 I

Business Monthly – March 2017

President Abdel Fattah el-Sisi to take “emergency measures” to help local businesses. In the ad, the businessmen argued that an estimated 2 million jobs are at stake if their member companies shut down for failure to pay back an estimated total of $10 billion in debt.

Meanwhile, the Federation of Egyptian Industries has asked the CBE and individual banks to revise the repayment schedules for businesses with dollardenominated debt and/or accept repayment at the pre-float exchange rate without requiring additional collateral. “After two years of currency and economic havoc,” says Mohamed Shaaban, chairman of the 6 October City Investors Association, scores of Egyptian companies are one shipment away from insolvency. “We don’t have pockets that deep anymore.”

Even firms that haven’t suffered a drop in business are facing a financial squeeze due to the massively devalued Egyptian currency. Trader Mohsen el Gedamy took out a $900,000 loan last October to import dried beans for the upcoming Ramadan season. “Now the bank is calling me nonstop” demanding an additional LE 8 million before it will release the dollars to pay Gedamy’s suppliers. “I don’t have LE 8 million to set aside for this shipment,” he says.

Currently, virtually all advanced economies, and many developing ones, offer some form of recourse for businesses and/or individuals who are unable to repay their debts. In Egypt, currently, debtors are more or less legally at the mercy of their creditors and their willingness to accept revised repayment terms. If the banks don’t feel like being flexible, the courts have the power to seize and liquidate a debtor’s assets—down to his home and his car—in order to repay creditors.

Over the years, a handful of highprofile businessmen have fled the country after being prosecuted for enormous unpaid debts. Ramy Lakah, a local tycoon with holdings in construction, health care and aviation who was elected to parliament in 2000, left Egypt after defaulting on somewhere between LE 1.2 to LE 1.4

billion he owed mainly to state-owned banks. Lakah still lives in France, where he owns several businesses, though his lawyers in Egypt are reportedly still negotiating with his creditors.

Others, however, seem to have somehow avoided prison even while facing ongoing charges connected to their debts. In January, the media reported that a court had handed over most of Ahmed Bahgat’s Dreamland Group, which includes an entertainment park, a residential compound and a TV network, to the National Bank of Egypt and Banque Misr after the banks accused him of failing to pay LE 4 billion in arrears.

“WE CAN’T CONTINUE TO TALK ABOUT NEW INVESTMENT WHILE THE SHADOW OF PRISON LOOMS OVER INVESTORS WHO GO BANKRUPT.”

The problem is this punitive approach makes Egypt less attractive to investors. The World Bank, in its “Doing Business Report 2017” ranks Egypt 109th among 190 countries in “resolving insolvency,” noting that creditors recover an average of 27 cents for every dollar lent, compared to 73 cents in OECD countries. The cost of going under in Egypt sucks up around 22 percent of distressed companies’ assets, compared to 9.1 percent in advanced economies, and the proceedings take an average of 2.5 years compared to 1.7 years in OECD nations.

Officials are pitching the new bankruptcy law as a cornerstone of reforms that aim to make Egypt more investorfriendly. According to those who’ve seen copies of the draft, the legislation would allow the debtor to present a plan for staying in business during bankruptcy. A court-appointed mediator would handle negotiations

KAREEM EL SHARNOBY

In Depth

between creditor and debtor with the aim of restructuring rather than liquidating distressed businesses.

Officials told reporters that Egypt’s draft law was modeled largely on the U.S. bankruptcy law, which operates on the free-market principle of encouraging entrepreneurship by allowing businesses “the freedom to fail.” There are numerous kinds of bankruptcy in America, the most well-known being Chapter 11, which allows distressed businesses to restructure and continue operations while shedding their debts to banks, employees and suppliers— not uncommonly in less than a year.

Notable examples of corporations that have reorganized under Chapter 11 include auto giant General Motors, which filed for bankruptcy in 2009 after reporting that it had $82.29 billion in assets and nearly twice as much—$172.81 billion—in debt.

While GM’s was the fourth-largest bankruptcy in U.S. history, it remains one of the world’s largest auto makers.

During a Republican presidential debate in 2015, would-be President Donald Trump boasted that he filed

for bankruptcy four times between 1991 and 2009 on behalf of various enterprises.

Unsurprisingly, the local business community has largely welcomed the draft law, saying an up-to-date bankruptcy code is long overdue in Egypt.

“It will solve a longtime nightmare for Egyptian businesses,” says Mohamed Al-Bahey, a board member at the FEI, adding that the new law should help promote the creation of new business and encourage informal enterprises to join the formal economy. “The fact that an entrepreneur taking a risk on the market can face jail if they get it wrong has always been a strong deterrent to small businesses,” says Ahmed Mashhour, chairman of the Egyptian Junior Businessmen Association.

“It’s about time that the government presented such a law to us,” agrees Hesham Emara, a member of the parliamentary economic committee and an economics professor at Damanhour University, pointing out that Egypt lags behind a number of developing economies in sub-Saharan Africa that have reformed bankruptcy laws to

give insolvent companies the option of a second chance via reorganization. “We can’t continue to talk about new investment while the shadow of prison looms over investors who go bankrupt,” says Emara.

Mostafa el Nasharty, deputy dean of the economics school at Misr for Sciences and Tech University worries that the potential downside of passing such a law now is that offering Egypt’s struggling businesses an exit pass will be all too tempting in the current climate. “The enforcers of the new law will be tested to the extreme right away,” he predicts.

Salah, the beleaguered former furniture maker, is confident his factory would still be running today—still employing hundreds of people and contributing to the economy—had he been given the option of reorganizing under bankruptcy protection. But back in 2009, Egypt’s economy was relatively strong and investors’ confidence was high. “Now,” he admits, “I might think it safer to exit the market and try again later.” ■

Business Monthly – March 2017

I

27

28

I

Business Monthly – March 2017

With a little help from my friends Local startups face plenty of challenges, from poor education to lack of funding. But as one entrepreneur who recently moved his venture to Cairo has discovered, Egypt also provides some unique advantages.

BY EDMUND BOWER

I

was on my way home after a busy work day recently when my flatmate messaged to inform me that the washing machine had broken down—again.

Normally, this would necessitate a call to Amr, our lazy, unreliable handyman. But this time, rather than spending the better part of the day trying to find a window when Amr wasn’t napping, I decided to try Elves, a new Cairo-based startup that bills itself as “your personal little helper.” I simply fired off a Facebook message from my smartphone, and sure enough, a technician arrived at my front door the following morning, and he soon had the temperamental washer up and running again. The final bill was a reasonable LE 350, including parts, and best of all, I was spared the usual time-consuming hassle of dealing with a broken household appliance.

Elves is one of a slew of so-called personal digital assistants that have popped up around the world in the last couple of years. Such services are the latest development of the so-called concierge economy, which is always looking for new ways to put the world at your fingertips.

Companies from Amazon to Taskrabbit are engineering digital helpers. Some of them, like Apple’s Siri, Google Now

and Microsoft’s Cortana, rely entirely on technology to fulfill requests, and as a result, the scope of what they can do is limited. On the other hand, companies like Magic and Operator employ human beings. They can therefore fulfill just about anything the client wants but for a much smaller number of folks—not to mention at a much higher cost. Elves—like Facebook M, the ambitious digital assistant that’s being built into the social media giant’s messenger app, with its more than 900 million users—is a hybrid of the two models. Just like its much larger counterpart, Elves’ customer service agents, which currently number around two-dozen, stand ready to assist with anything from doing your grocery shopping to helping you propose to your girlfriend.

In the future, such “conversational platforms” are expected to be the way that we interact with artificial intelligence. With AI becoming more sophisticated every year, the big tech firms are all racing to come up with the digital assistant to rule them all, while smaller, niche players are also entering the game.

Elves was launched in late 2015 by digital entrepreneur Karim Elsahy, an Egyptian-American who had been running a B2B startup in Boston. He and a handful of colleagues launched the digital assistant “kind of as an experiment” during their Christmas holidays. “The numbers were very small, but there was something delightful about it,” says Elsahy, 37, who after having worked on behalf of nameless corporations for the last few years welcomed the challenge of trying to meet the varied and often strange requests of human customers. Once, Elves located an $88,000 Patek Philippe watch for a shopper

Business Monthly – March 2017

I

29

Cover Story

halfway around the world. Another time it organized a fishing trip for a group of American investors on the Indian Ocean.

In early 2016, Elsahy decided to move his business to Egypt, where his mother and father, a prominent plastic surgeon, had been raised. On trips to Cairo to visit relatives, Elsahy noticed that he was using the app more frequently himself than he did when back home in the United States—being as he was in a packed megacity of 25 million, where very little basic information is online and accomplishing seemingly straightforward tasks like paying bills and getting things fixed could turn into epic affairs that took days or weeks. Best of all, unlike America, where new competitors in the personal digital assistant space were cropping up on a regular basis, Egypt had nothing at all like Elves—and people needed it.

“It became obvious that the more difficult the country, the more valuable Elves is,” says Elsahy, who wears jeans and sports a neatly trimmed circle beard. In the United States in 2017, where many basic tasks can be navigated with a couple of keystrokes, personal digital assistants, for now at least, generally amount to little more than an extra layer of convenience: “There, it’s ‘Can you add two more people to my dinner reservation?’”

30 I

Business Monthly – March 2017

says Elsahy. Waiting on hold with automated phone systems is another thing digitally savvy Americans tend to request.

In Egypt, however, people have started relying on Elves for tasks that would otherwise be all but impossible or would require spending inordinate amounts of time and money to accomplish. It can help getting a package through customs, for instance, or tracking down hard-tofind or sold out items—things that in America or Europe you could probably get quickly simply by ordering online.

And while American customers—not to mention the venture capitalists that fund startups like Elsahy’s—have deeper pockets, being in the United States also means much higher labor costs.

Currently, some 60 percent of Elves’ approximately 13,000 unique monthly users are in Egypt, says Elsahy. (The rest of its requests mostly come from the United States, where he stresses that Elves is still officially headquartered, although the company currently has no more than “a couple of guys” working out of a satellite office in Boston, compared to around 40 engineers and “elves” on staff here in Cairo.) Elsahy says his long-term plan is to expand regionally and beyond, but in the meantime, Elves is clearly benefiting from catering to a mostly Egyptian market.

Being a web-based service that communicates exclusively in English via Facebook messenger or its own app, the startup is also targeting an elite, lucrative clientele sought after by firms like London Cab, Gourmet Egypt and Vodafone, all of which have contracts with Elves. According to Elsahy, the firm is currently bringing in around LE 2 million a month exclusively from such corporate partnerships, which are its sole source of revenue. A darling at the 2016 Rise Up Egypt startup summit held last December, Elves has also recently raised $400,000 in Series A funding, putting it nearly halfway to its $1-million goal.

Con O’Donnell, an Irish expat who is one of the co-founders of RiseUp, says that despite Egypt’s drawbacks for digital startups—scarce talent, a difficult, bureaucratic business environment and a very small pool of available capital— moving here was a shrewd move for a venture like Elves. “In a country like Egypt,” he says, individual customers are less lucrative, but the value of the service “to the customer is much higher.” By concentrating on an emerging market economy of more than 90,000 people—around one-third of which now have access to the internet—Elves is building a valuable customer base of dedicated users, says

Cover Story

O’Donnell, adding that Egyptians are also more forgiving of the developing service than the clientele in rich countries.

“Americans won’t bear the service level as it learns,” says Elsahy; if U.S. customers aren’t 100-percent pleased, they’ll simply go elsewhere.

Our bots, ourselves

The best way to understand what Elves does is go to their website or Facebook page and try it for yourself. The elves are happy to plan your entire vacation— including suggesting destinations—or a romantic evening for your special someone, down to the music and the flowers.

Not wanting to get too intimate with my elf right off the bat, I asked Aby—she told me her name—to book me a cab to work, but I declined the private car she offered for LE 100. (It’s a LE 15 taxi ride.)

Elsahy, when I told him about it later, argued that I should have simply asked for a cheaper option. He said the elves had probably assumed I was in town on business after figuring out that I was foreign from my name and Facebook page.

“You should treat them like your assistant,” he says. “If it’s too expensive, message them back, and they’ll get you an Uber.”

Unlike personal digital assistants like Silicon Valley-based Magic, which charges 60 cents a minute for its personalized services, or London-based Dispatch, which delivers goods to your door via motorcycle courier for a hefty fee, Elves says it doesn’t charge users anything, apart from costs. “It’s totally worth it to me to pay someone LE 40 to deal with the phone company,” says a Maadi resident who recently contracted Elves to file a complaint on her behalf with Telecom Egypt. She explained that she and her husband had given up calling the firm after both had been repeatedly “transferred” (read: hung up on) by TE customer service agents. Fortunately, Elves promptly sent a courier who managed to straighten out the problem. “They are the reason I'm typing this using a DSL connection,” wrote the happy customer.

For Elves, catering mainly to the Egyptian market has enabled a tiny startup to mimic—albeit on a small, local scale—the virtual assistant that Facebook, a multi-billion dollar company, is expected to take years to roll out. Facebook M is powered by artificial intelligence as well as a band of Facebook employees, dubbed “M trainers.” It launched in beta in 2015, available only to a relatively small pool of users in California. Like the

M trainers, the elves are teaching bots to recognize keywords and pick out patterns with every conversation. For example, if a customer messages asking for a flight from Cairo to Paris, the bot will know from monitoring hundreds of similar flight requests that it needs to ask the same questions, such as: “When do you want to fly?” and “What’s your budget?”

Over time, the computer will become “incrementally better,” explains Elsahy.

When you place a request to Elves, the service generally responds within moments, with an elf who tells you his or her name and assures you that “I am a real person.” However, with time, the firm’s goal is to teach the computer to respond to more and more requests, allowing it to greatly expand its reach.

The Elves for the moment are quite happy not to make a piastre on the majority of transactions, says Elsahy, because “the real value of the business is the underlying data.”

Big fish in a small pond

Elves is headquartered in a garden apartment on a leafy block in Maadi that looks more like a college dorm than an office. Most of its five rooms are filled with millennials tapping

Business Monthly – March 2017

I

31

Cover Story

away at laptops perched on desks or sitting cross-legged on leather sofas.

A loft bed is set up in the room at the back, lending to its university-accommodation vibe. As I visited on Valentine’s Day, the place was littered with boxes of chocolates and bouquets of roses and a huge heart shaped balloon with “My Ku” written on the side, ready to be delivered to loved ones by Elves couriers.

Someone was playing Coldplay on their phone, and a whiteboard on the wall was decorated with 21st-century motivational phrases like “Love your users!” and “Put yourself in their shoes!” Elves are often allowed to work from home; like modern gigeconomy workers the world over, all they need is an internet connection and a mobile phone.

The elves tend to be recent university graduates in their early 20s, a group of Egyptians that’s struggling lately more than ever to find decent jobs without leaving the country. Sara Sabry, 21, has worked there since July. On the day I visited, she was training a new recruit, 20-year-old Sara Ashraf. Entry-level, Englishspeaking college graduates, both Saras did stints at call centers before coming to Elves. Here, they earn slightly better money—around LE 3,000 to LE 4,000 a month.

Presumably, fielding a broad range of requests from human beings is also a

32

I

Business Monthly – March 2017

more interesting and rewarding way to spend the workday than reading from a script as a call center operator.

At 2 p.m., the elves were fielding last-minute holiday requests and a middle-of-the-night restaurant booking from a customer in Los Angeles as well as a local inquiring about the status of his car, which was in the shop, and a person ordering a new phone from United States. Elsahy’s wife, Abeer Elsisi, who manages the elf team, was overseeing a longer-term request from a Cairo woman who needs help purchasing all the equipment for her soon-to-be-opened health spa.

Once, someone messaged Elves for emergency advice on what to wear on a first date. “We had him send photos of his clothes,” says 40-year-old Ahmed Kassem, an engineer, recalling that before long, a small group of employees had gathered around a computer screen to debate which look was best. Apparently, all went well, because the man sent a request a week later for a restaurant booking for a second date. Another time, the team arranged for a boat stocked with snacks and beer for a guy visiting an El Gouna resort with friends; they also tracked down the phone of a Cairo resident who’d left it somewhere after a weekend at the North Coast.

I spent a week throwing various tasks at Elves, including asking them to buy me a new laptop charger and a

new memory card for my camera, both of which were delivered to my flat. They also paid my internet bill, recommended a clinic where I could get a blood test and arranged for Indian food to be sent to my office.

While my washing machine was being fixed, the firm arranged for a pick-up service to wash and fold my laundry—although carried a rather steep pricetag of LE 750.

Indeed, Elves’ selling point is that it can field any kind of task a person comes up with. While chat-bot powered services like Amazon’s Alexa can set your alarm clock or book a flight for you (in the case of GoButler, a fully automated service specializing in air travel assistance)—Elves can respond to anything a human can. “You can invoke Siri and she can tell you the weather.

But you can’t say: ‘Hey, Siri, make sure my laundry is done before I get home from work.’” Of course, the reason Elves can offer such a versatile digital assistant is because the requests are being handled by human beings. Elsahy acknowledges that currently every transaction is managed by a human, but adds that the system is “starting to be a little bit more automated.”

Currently, elves handle a maximum of 25 chats, or requests, at a time. By the end of the year, his goal is for bots to field four times that amount.

This seems like an ambitious goal for a small firm using artificial intelligence technology that, by Elsahy’s own admission, is “in its infancy.”

Last April, at a tech conference in San Francisco, Facebook Messenger chief David Marcus said that it would be “years” before the firm’s M digital personal assistant is smart enough to minimize human involvement—and this from a firm that has the resources to be on the cutting edge of artificial intelligence R&D. In the meantime, though Elsahy can expand by simply hire more human elves from Cairo’s enormous, cheap labor pool without making his overhead prohibitively expensive.■

Stock Analysis

Why you should have sold in January

T

he stock market had a hangover last month. After enjoying the traditional January effect, which saw the benchmark EGX 30 climb 2.7 percent, it had dropped 1.8 percent by mid-February, which is also per usual, the second month of the year being the market’s fourth-worst performing month on average. In the period from Jan. 15 to Feb. 15, the EGX 30 dropped 6.3 percent to 12,448.4, while the EGX 70 and the EGX 100 were up by 7.2 percent and 4.7 percent at 507.2 and 1,209.6, respectively. While declines outnumbered advances by a ratio of 13-to-6, small caps continued to outperform large caps. Reflecting this trend, the small-cap rich EGX 70 was up 9.4 percent on a year-to-date basis, versus just 0.8 percent for the EGX 30.

The winning performance of small-caps was led by stocks like Central Egypt Flour Mills (CEFM), which was up 53 percent at LE 26.02. The company reported profits of LE 26.9 million, up 851 percent, in the second quarter of fiscal 2016/17. Paint and chemical firm PACHIN (PACH) was up 31.9 percent at LE 25.20 after the company revealed that its consolidated financials for 2016 would be up to the tune of LE 39 million, thanks to the devaluation of the Egyptian pound. PACHIN also announced that it had signed a deal with an affiliate of the National Authority for Military Production to introduce unified products and services,

though both companies plan to retain their corporate identities.

Similarly, the Egyptian Financial & Industrial Co. (EFIC) saw its stock jump 29.1 percent to LE 12.32 on the news that its bottom line is up by LE 32.2 million.

Shares of Misr Chemical Industries (MICH) jumped 24.1 percent to LE 5.26. The firm also noted that its annual financials would be up by some LE 4.8 million thanks to the cheaper pound. The gain was despite suffering a loss of LE1.04 million in the second quarter of fiscal 2016/17 versus a profit of LE 2.54 million in same quarter of the previous year. Last but not least, shares of Egyptian Chemical Industries, or Kima (EGCH), ended the period up 21.2 percent at LE 5.49. The company had called to increase its capital by LE 857 million or 42 percent from LE 2.035 billion, which was not fully covered (only 87.6 percent). the firm posted net earnings of LE 257.5 million in the first half of fiscal 2016/17 versus just LE 25.6 million a year ago.

Recently, the strengthening Egyptian pound against the U.S. dollar has hurt some large-cap stocks as devaluation-related gains slipped slightly. The dollar fell by 12.7 percent during the period, from an exchange rate of LE 18.96 to LE 16.55. The question on investors’ minds is what will happen to the Egyptian pound now? The answer is just about anyone’s guess.

IN THE SPOTLIGHT

Misr Fertilizers Production Co. Eighteen years after it spun off 35 percent of its shares through an IPO, Misr Fertilizers Production Co. (MFPC)—commonly known as MOPCO—finally saw its shares traded on the Egyptian Exchange last September. The firm, with a capacity of 1.9 million tons of urea and 1.2 million tons of ammonia, benefits from exporting most of its goods. However, investors only just recently seem to have begun to appreciate this fact. The stock skyrocketed 71.4 percent to LE 55.98 during the period, hitting an all-time high of LE 59.58 on Feb. 8.

34

I

Business Monthly – March 2017

Market Watch

Capital Markets Egyptian price indices - EGX 30

12,448

EGX 30

Egyptian price indices - EGX 70

507.16

EGX 70

Selected sector performance

Business Monthly – March 2017

I

35

Market Watch

Capital Markets Corporate News MM to float 25 percent of its shares MM Group for Industry & International Trade intends to float 25 percent of its shares on the Egyptian Exchange through an IPO by mid-March. Eighty percent of the offered shares will be allocated through a private placement. The stock was priced at LE 6.75 a share, or LE 2.7 billion, by an independent financial advisor. The MM Group is the exclusive agent for upscale auto brands Jaguar, Ferrari, Bentley and Land Rover. It also represents Vodafone and Samsung.

Housing & Development bank to spin off its real estate business The board of Housing & Development Bank (HDBK) says it’s looking into splitting into two companies, one for financial services and another for real estate. The bank plans to appoint financial and legal advisors to carry out a study of the proposal, to be presented to the board upon completion. The HDBK owns several real estate companies, such as Hyde Park Properties for Development.

Juhayna to cut investments The CEO of Juhayna Food Industries (JUFO) said that his company is looking to reduce its investments in 2017 in the face of a recent slowdown as a result of declining consumer purchasing power. The juice and dairy giant invested LE 450 million in 2016, less than its LE 500-million target. The head of the firm said he expects first quarter earnings to shrink further before rebounding in the following quarter. Juhayna plans to hike its prices by 5-10 percent by the end of the year.

AMOC forays into refining The CEO of Alexandria Mineral Oils Co. (AMOC) said that his company will tap the oil refining business in March by refining 350,000 barrels a month at the Midor refinery. The Egyptian General Petroleum Corp. (EGPC) will supply AMOC with

crude, to be refined then the latter supplies back the final products to the EGPC at $2 a barrel.

Heliopolis Housing to renovate historic building Heliopolis Housing & Development (HELI) signed a LE 37.2million contract with Arab Contractors to renovate one of its historical buildings at its Grenada projects in Heliopolis. The project is expected to be completed in a year. The firm is targeting earnings of LE 300 million for fiscal 2016/17, compared to LE 400 million the previous year. It attributed the decline to lower demand for its units on the back of the Egyptian pound floatation. Meanwhile, the company plans to purchase 500 feddans in the so-called New Administrative Capital for a residential project to be built in conjunction with other developers.

Real estate and construction firms buy and sell treasury shares Several real estate and construction companies did things with their treasury shares last month. First, Orascom Construction Limited (ORAS) canceled the 1 million shares it bought in October. Second, SODIC (OCDI) said it’s looking to increase its issued and paid-in capital from LE 1.36 billion to LE 1.37 billion, to be financed from special reserves and allocated to the employees’ stock option plan. Third, Madinet Nasr Housing & Development (MNHD) announced the sale of four million treasury shares.

Global Telecom’s share buyback oversubscribed Global Telecom Holding (GTHE) said that its share buyback program was 2.53 times oversubscribed. The company had tendered for 524.6 million shares, or 10 percent of its issued shares, at LE 7.90 a share. However, the total number of offered shares reached 1.328 billion. The cash value of the treasury stocks accepted within the program was to be paid to each shareholder by the end of February.

International stock price indices Feb.15

Jan.15

Nov.15

Sept.15

value

% change

value

% change

value

% change

DOW

20,611.00

19,885.73

3.65%

18,923.00

8.92%

18,212.48

13.17%

NASDAQ

5,819.44

5,574.12

4.40%

5,275.62

10.31%

5,249.69

10.85%

S&P 500

2,649.25

2,274.64

16.47%

2,176.94

21.70%

2,147.26

23.38%

FTSE 100

7,302.41

7,337.81

-0.48%

6,792.74

7.50%

6,730.30

8.50%

NIKKEI 225

19,437.98

19,287.28

0.78%

17,668.15

10.02%

16,405.01

18.49%

36

I

Business Monthly – March 2017

Market Watch

Money & Banking INTEREST RATES

BANKING & RESERVES (in millions of LE) 2016

End of

March

April

May

June

July

August

September

October

430,378

442,281

464,664

478,082

449,591

498,438

508,167

507,549

17,011

17,521

17,546

15,536

16,564

19,592

19,066

23,058

Domestic Liquidity

1,987,839

2,006,632

2,044,293

2,094,500

2,119,715

2,151,648

2,183,148

2,198,196

Foreign Assets (net)

1,457,994

1,466,460

1,491,322

1,521,565

1,541,213

1,557,553

1,575,990

1,584,887

Domestic Assets

1,987,839

2,006,632

2,044,293

2,094,500

2,119,715

2,151,648

2,153,148

2,198,196

18.77

18.83

18.61

18.53

18.52

18.33

18.00

17.91

Reserve Money Int'l Reserves (net, US$ mln)

Dollarization Rate (%) Discounted Bills (except CBE)

4,749

4,660

4,963

5,601

5,425

5,308

5,330

5,358

847,574

860,783

920,697

937,126

938,918

951,330

964,823

975,809

Securities (except CBE)

1,179,715

1,199,345

1,254,065

1,283,616

1,298,739

1,349,749

1,345,548

1,353,803

Currency in Circulation

331,977

342,842

352,896

369,321

376,908

387,699

395,218

397,480

Bank Loans (except CBE)

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

Feb.15 12.811 44.034 20.895 12.798 2.433 17.719 0.249 14.698 23.498 54.646 1.089 0.290 4.455 4.564 4.550 16.726

Jan.15, Amount 14.169 49.743 23.016 14.401 2.738 20.104 0.277 16.500 26.582 61.754 1.248 0.317 5.033 5.069 5.144 18.897

2017 change -9.58% -11.48% -9.22% -11.13% -11.16% -11.86% -9.89% -10.92% -11.60% -11.51% -12.74% -8.55% -11.48% -9.96% -11.54% -11.49%

Nov. 15 2016 Amount change 12.002 6.74% 41.373 6.43% 19.9245 4.87% 11.734 9.07% 2.324 4.69% 17.142 3.37% 0.235 6.33% 14.800 -0.69% 22.372 5.04% 52.245 4.60% 1.039 4.81% 0.241 20.45% 4.239 5.11% 4.856 -6.02% 4.331 5.07% 15.910 5.13%

Sept. 15, 2016 Amount change 6.626 93.35% 23.355 88.54% 11.701 78.57% 6.730 90.15% 1.328 83.14% 9.957 77.97% 0.132 88.77% 8.630 70.31% 12.463 88.55% 29.364 86.10% 0.578 88.41% 0.136 113.14% 2.363 88.58% 2.972 53.55% 2.413 88.56% 8.866 88.66%

Feb. 15, 2016 Amount change 5.489 133.37% 19.839 121.96% 11.200 86.56% 5.576 129.54% 1.180 106.18% 8.691 103.87% 0.113 120.37% 6.818 115.58% 10.914 115.30% 25.738 112.32% 0.510 113.53% 0.098 195.87% 2.058 116.49% 2.630 73.53% 2.103 116.38% 7.724 116.55%

Business Monthly – March 2017

I

37

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

2016-17

Q3

Q4

End of year

Q1

Q2

Q3

Q4

Q1

-9,385.4

-9,227.6

-38,785.4

-9,985.9

-9,561.6

-9,858.5

-8,285.2

-8,670.7

Exports

4,617.7

5,201.6

22,058.2

4,646.1

4,399.1

4,275.5

5,298.9

5,261.4

Imports

-14,003.1

-14,429.2

-60,843.6

-14,632.0

-13,960.7

-14,134.0

-13,584.1

-13,932.1

341.6

500.6

4,727.5

1,686.8

543.7

177.9

-346.7

1,410.7

Receipts

4,385.0

5,182.5

22,024.6

5,142.9

4,131.6

3,513.9

3,687.8

3,764.3

Payments

4,043.4

4,682.2

17,297.1

3,456.1

3,587.9

3,336.0

40,434.5

2,353.6

Balance of Goods & Services

-9,043.8

-8,727.3

-34,057.9

-8,299.1

-9,017.9

9,680.6

-8,361.9

-1,118.0

Services (net)

Transfers

4,963.1

4,926.8

21,875.7

4,318.8

3,992.7

4,131.4

4,442.2

3,394.7

Balance of Current Account

-4,080.7

-3,800.5

-12,182.2

-3,980.0

-5,025.2

-5,549.2

-4,189.7

-4,983.3

Capital & Financial Account

6,067.2

10,682.6

17,633.6

1,500.5

7,816.9

8,224.8

5,944.8

7,090.8

Foreign Direct Investment

2,947.9

689.9

6,371.0

1,385.5

1,718.5

2,772.9

992.9

18,872.2

-29.1

4,771.0

3,724.9

3,656.7

-251.6

235.4

-827.5

-1,891.2

Overall Balance

SOURCE:

CENTRAL BANK OF EGYPT

NON-PETROLEUM TRADE (in millions of U.S. $) Exports (Q1 2016-17) Total

Imports (Q1 2016-17)

Balance (Q1 2016-17)

5,261.4

13,932.1

477.8

863.6

-385.8

1,554.0

3,982.6

-2,428.6

Other European countries

406.9

915.9

-509.0

Russian Federation & CIS

31.7

769.7

-738.0

1,654.0

2,678.3

-1,024.3

Asian countries (non Arab)

419.6

2,864.6

-2,445.0

African countries (non Arab)

139.3

166.3

-27.0

Australia

578.1

1,691.1

-1,113.0

1,481.7

5,377.2

U.S.A. E.U.

Arab countries

Other countries

-8,670.7

-3,895.5 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:

38

I

CENTRAL BANK OF EGYPT

Business Monthly – March 2017

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 DEC. 2016

EGYPTIAN IMPORTS FROM THE U.S. DURING DEC. 2016

SOURCE:

US INTERNATIONAL TRADE COMMISSION (USITC)

Business Monthly – March 2017

I

39

Wealth

MIND THE GAP Addressing global income inequality

By Rachel Scheier

O

ne of the most notable post-game analyses of the U.S. presidential election last November was penned by the French economist Thomas Piketty, who argued that Donald Trump’s upset victory was mainly a symptom of resentment over the widening gap between rich and poor. Piketty’s 2013 bestseller “Capital in the Twenty-First Century,” a sweeping account of rising global inequality, documents how an increasingly staggering amount of the world’s wealth belongs to small economic elite. “He also makes a powerful case that we’re on the way back to ‘patrimonial capitalism,’ in which the commanding heights of the economy are dominated not just by wealth, but also by inherited wealth, in which birth matters more than effort and talent,” writes Paul Krugman in The New York Times. Writing in Le Monde days after the election, Piketty cites angry, American voters’ suspicion of Democratic elites: “Trump’s victory is primarily due to the explosion in economic and geographic inequality in the United States over several decades and the inability of successive governments to deal with this.”

Following the global financial crisis, more attention has been paid to the widening gap between “the 99 percent” and the world’s tiny privileged minority. According to Oxfam’s latest report on global inequality, released in January, just eight men— Bill Gates, Warren Buffett, Jeff Bezos, Mark Zuckerberg, Larry Ellison, Michael Bloomberg, Carlos Slim and Amancio Ortega— own the same amount of wealth as the poorest half of the world population combined. “As growth benefits the richest, the rest of society—especially the poorest—suffers,” writes Oxfam, noting that “the very design of our economies...have taken us to this

40

I

Business Monthly – March 2017

extreme, unsustainable and unjust point.” In 2012, the World Economic Forum also identified rising economic inequality as a major threat to social stability; in 2015, the World Bank twinned its goal for ending poverty with the need for shared prosperity. In his farewell speech to the United Nations General Assembly in September 2016, U.S. President Barack Obama declared that “a world where 1 percent of humanity controls as much wealth as the bottom 99 percent will never be stable.”

Recent research has only bolstered Piketty’s point that more and more of the world’s money is in the hands of people who did nothing more to earn it than be born into the right family. In the next 20 years, according to the UBS 2016 “Billionaires” report, some 500 people will hand over a record $2.1 trillion to their heirs—a sum larger than the GDP of India.

The breathtaking riches globalization and technology have helped produce in rent decades have disproportionately gone into the pockets of the very wealthy. According to recent research by economists, the U.S. economy has more than doubled in size in the last 34 years, but the poorest half of the country is earning nominally more than it did three-and-a-half decades ago, while the richest 1 percent is raking in triple what it did in the early 1980s. The trend in developing countries is not much different, writes Oxfam. Between 1988 and 2011, the poorest 10 percent saw their average earnings increase by just $3 a year, while the wealthiest 1 percent made 182 times more than that. The group reports that a FTSE-100 CEO in the UK earns as much in a year as 10,000 people working in garment factories in Bangladesh.

Here in Egypt, since the 2001 revolution, “social justice” has become an important political buzz-phrase. Around the world, there is growing recognition that “left unchecked, growing

Wealth

inequality threatens to pull our societies apart,” writes Oxfam. “It increases crime and insecurity, and undermines the fight to end poverty. It leaves more people living in fear and fewer in hope.”

However, even as a growing consensus has emerged about the problem of the widening wealth gap, there is little out there in the way of practical advice for what governments and policymakers should do about it. This was the impetus for the World Economic Forum’s 2017 “Inclusive Growth and Development Report,” published as the group gathered this year at its annual retreat in Davos, Switzerland. Speaking to a CNBC reporter at the snowy Alpine resort that hosts the yearly gathering of economic powerbrokers, Richard Samans, a member of the WEF managing board said, “The world is basically in loud agreement that inclusive growth is the way to go, but it has been much more aspiration than action.” Hence, the paper seeks to be a guide for officials seeking to achieve “greater synergy between economic growth and more broadly-based progress in living standards.” Building on the first version of the report published in 2015, the WEF has also included an Inclusive Development Index, which measures and compares inclusive growth in 109 countries. The ranking “offers a more integrated and holistic picture of the state of economic development of countries than Gross Domestic Product per capita alone.”

The ultimate goal of economic growth, as the WEF points out, is “broad-based and sustained progress in living standards.”

Traditionally, measured by a country’s growth is per capita GDP. In modern market economies, a combination of institutions and “structural policy incentives” are supposed to make for an “implicit income distribution system” that helps “to diffuse widely the benefits of an expanding national economy in terms of household income, opportunity, economic security, and quality of life.” In other words, in developed countries, at least, systems have been put in place to ensure that the fruits of capitalism don’t just benefit a few lucky souls at the top.

However, in advanced economies in the last couple of decades, the “policy and institutional ecosystem” that’s supposed to ensure equitable growth has either malfunctioned or stopped working entirely due to a variety of factors including “accelerating technological change, global integration, domestic deregulation, and immigration,” which has been driving major changes in labor markets. “This has resulted in heightened dislocation, pressure on median wages, and insecurity, even though these countries have enhanced efficiency and overall national income.”

Meanwhile, developing countries have struggled to spread the wealth of rising industrialization and growth enough to meet growing social expectations. The outcome is that “in rich and poor countries alike, social inclusion is a burning political issue.”

Countries that have “done a relatively good job of making their growth processes more inclusive” include Cambodia, the Czech Republic, New Zealand, South Korea and Vietnam—nations at very different levels of economic development—while those who scored low on the IDI include Brazil, Ireland, Japan, Mexico, Nigeria, South Africa and the United States. Egypt is in the latter

group, coming in 73rd among the 79 developing economies rated. With growth down and unemployment up, fewer Egyptian workers are supporting more people. “An extremely high debt-toGDP ratio,” poor education and transport systems and “pervasive corruption” are other contributing factors, despite Egypt’s “history of entrepreneurship, business and employment creation,” writes the WEF. It’s not alone. “Significantly, 51 percent of the 103 countries for which these data are available saw their IDI scores decline over the past five years, attesting to the legitimacy of public concern and challenge facing policymakers regarding the difficulty of translating economic growth into broad social progress.”

The organization notes that “the world economy is at a crossroads.” Global growth has slowed and is predicted to slow further in the wake of political shocks like Brexit and Trump. The International Monetary Fund projects world growth of 3.1 percent in 2016, down from around 4 percent in 2011. Emerging economies like the BRICS that enjoyed a post-financial crisis growth spurt have also slowed markedly, and advanced economies are even more sluggish. Meanwhile, new advanced technologies—“the Fourth Industrial Revolution”—threatens to upend traditional notions about how economic development works. For example, the advent of industrial robots has threatened to transform manufacturing, which “has provided a ladder out of widespread poverty for countless countries over the past two generations.”

The WEF agrees with Piketty that frustration with the stagnation in advanced economies has fed the rise of “political parties that challenge the fundamental tenets of the post-war liberal international economic order, including trade liberalization, supranational governance, and expanded capital and labor mobility.”

Meanwhile, increasingly connected populations in the developing world are raising their own demands for better opportunities.

All this has raised the question of whether the “income distribution system” of modern market capitalism can be fixed.

The answer is yes and no, concludes the WEF, which prescribes “a robust inclusive-growth strategy” that is “both prolabor and pro-business, an agenda to boost both social inclusion and economic efficiency through a stronger focus on institutions.” Beginning at the turn of the century and especially following the Great Depression, most of today’s advanced industrialized countries underwent “a sustained process of institutional deepening” that bolstered their economies, reduced poverty and gave rise to a thriving middle class. These included labor, financial and social insurance reforms as well as pro-business measures to encourage competition and risk. Today, the world needs “a new global growth agenda” involving national public-private efforts bolstered by the international community. The world population is expected to reach 9.7 billion by mid-century, with the vast majority of the growth taking place in poor countries.

Sustainable economic development depends on expanding labor productivity, especially by investing in opportunities for young people. ■

Business Monthly – March 2017 I

41

Dining Out

SUBURBAN SOUTH OF THE BORDER

BY KATE DURHAM

Y

ou could call it a hobby, though sometimes it feels more like a quest. For years now, I—along with fellow taco and enchilada aficionados here in Egypt— have been on the hunt for decent Mexican food. At times, it really looked like we had bagged our quarry. There was the guy from Texas who opened up a reasonably authentic hole-in-the-wall

42

I

Business Monthly – March 2017

joint in Maadi, where he served homemade chips and guacamole. There was the festively decorated restaurant that made first-rate Margaritas. But for some reason, these spots never manage to stay open very long. Instead, we have places that serve hot dogs with jalapeño slices.

On the bright side, the boom in megamalls in and around the capital in recent years has brought with it a host of American chain-eateries, including some that specialize in Tex-Mex com-

fort food. Obviously, you don’t go to a mall restaurant expecting five-star cuisine. What you do want is a tasty, generous meal at an affordable price that— crucially—doesn’t include any big surprises. Thus, my two amigas and I mosied on over to El Chico, which opened last summer at the Cairo Festival City Mall. No longer are you relegated to eating Swedish meatballs and smoked salmon after purchasing your Poäng chair.

Dining Out

Pleasantly, El Chico cleared the first hurdle by offering complimentary chips and salsa—a bonus for weary shoppers. We received three individual servings of salsa roja, a red, tomato-based purée with a satisfying chili afterburn. Giving everyone their own bowls is convenient and sanitary, I guess, but with them we received just one tiny bowl of barely salted corn chips. The staff cheerfully brought out two more bowls of chips upon request, fortunately, and we were ready for the second item on our Tex-Mex checklist, the Top Shelf Guacamole (LE 45). In my humble opinion, guacamole prepared tableside is one of the best gimmicks to hit the restaurant scene—it’s fun to watch and you know it’s fresh. Here again, however, the ratio was a bit off. The waiter gently and conscientiously mashed the full complement of lemon, spices, onions, jalapeño peppers and tomatoes into the avocado halves, but the final product was a bit bland. On the plus side, the chips didn’t disintegrate on contact with the guac.

The vegetarian in our group proceeded with the Bean Nachos (LE 54), a set of perfectly symmetrical fried corn tortilla wedges with a thick blanket of cheese covering the barest hint of refried beans.

The beans were so scant, in fact, that at first we thought they had brought us plain cheese nachos by mistake. The plate comes with jalapeño slices (naturally) and a sour cream/avocado concoction, but I just used the nachos as a cheesy vehicle for my remaining salsa and guacamole.

The only other clearly marked vegetarian option on the menu was the Veggie Fajitas (LE 65), a mélange of onions, zucchini and potatoes served atop the traditional sizzling skillet. This too missed the mark. In general, El Chico just isn’t very bold with the spices, which is not surprising when you’re trying for mass appeal among mall-goers. On the other hand, a lack of spice tends to equal a lack of flavor. My companion said her stir-fry tasted more Asian than fajita-like—not terrible, but also not what she was hoping for. (Speaking of unmet expectations, be warned that the El Chico menu on ElMenus.com turned out to be completely out of date, with many of the items listed online not there.)

My other companion’s Chicken Chipotle (LE 80), which she ordered “spicy,” likewise was in need of some kick, though it did have the distinct smoky taste of the Chipotle pepper after which the dish is named. The chicken breast fillet was moist, dressed with a creamy Chipotle sauce and Monterey Jack cheese.

I apparently had better menu karma that evening. My Asada Combo (LE 95), a carne asada-style steak alongside a cheese-and-onion enchilada, included a tender, juicy cut of meat sat upon a thin layer of chimichurri sauce. Originating in Argentina, which is famous for its beef, chimichurri is made from parsley, oregano, garlic, vinegar and red chili pepper. El Chico’s version had a tangy, distinct zing that accented the meat nicely. (There is also a Salmon Chimichurri option on the menu.) The enchilada was the softer side of the meal in both texture and taste, with the semisweet cooked onions a gentle murmur amid the blanket of mild cheese covering the soft corn tortilla.

One of the restaurant’s strengths is its service, which was friendly and attentive. Granted, it did not appear to be a busy evening at the mall, but the staff was clearly having fun interacting with the customers, which always adds to the ambience. As befitting a proper Tex Mex joint, the portions—including the sides, which arrived on their own plates— were generous, and we couldn’t even

contemplate dessert, which was just as well as the choices were fairly standard, including flan (the Mexican version of creme caramel) and a brownie sundae.

El Chico is family friendly, which is obviously important if you’re located at the mall. Fussy or less adventurous palates can choose from options like burgers, mozzarella sticks (LE 50, with an excellent spicy marinara sauce) or mashed potatoes. The cozy, upholstered booths have high backs, offering a sense of privacy and reducing the chance that your budding gymnast inadvertently drops in on a neighboring table. Wide aisles make it easy for waiters to navigate around strollers and hapless parents trailing restless toddlers.

There is also terrace seating. For visual stimuli, a grid of colored lights crisscrosses the ceiling, while the brick walls are adorned with rows of colorful embroidered sombreros, mounted longhorn steer horns and other standard Tex-Mex paraphernalia as well as the usual flat-screen TVs. During our visit, one was tuned to a sports channel while the other broadcast “Kung Fu Panda.”

He probably would have loved the Veggie Fajitas. ■

El Chico Cairo Festival City Mall, Fifth Settlement (02) 2616-8246 Open daily, 10 a.m. to midnight

Business Monthly – March 2017 I

43

Heritage

THE FOURTH PYRAMID

BY EDMUND BOWER

44

I

Business Monthly – March 2017

Heritage

It’s the biggest construction project at the Giza Plateau in almost 5,000 years. Fifteen years after it was first announced and following numerous delays and budget overruns, the $1-billion Grand Egyptian Museum is finally taking shape, a great hulk of steel and concrete just two kilometers north of the pyramids. Officials say the framework is complete, and work is now beginning on the glass and alabaster exterior, which is designed to shimmer in the desert sun. Seven days a week, the sound of pneumatic drills, trucks and hammers ring out over the necropolis as 3,000 laborers work in the baking sun to have the building ready to open by next year’s unspecified opening date.

Whenever it does open, it will be the biggest tourism project to come to fruition since tourism plummeted following the 2011 revolution. Speaking at an AmCham event last month, the director general of the project, Tarek Tawfik, said, “We consider this the fourth pyramid of Giza.”

According to Tawfik, the site will total almost half a billion square meters, with 60,000 square meters alone dedicated to antiquities— roughly as much as The Louvre in Paris, the most visited museum in the world. The GEM is set to be the world’s largest archeology museum. Dwarfing the old Egyptian Museum in Tahrir Square—the GEM will be five times bigger—it will feature artifacts that have never been seen before, including what Tawfik calls “the complete Tutankhamun” collection. The project is already over budget by more than half-a-billion dollars, with more than over $700 million in loans from the Japanese government alone, so officials are counting on it to help bring back

tourism. The museum’s ambitious initial target is to receive 5 million visitors a year.

Artist renditions of the building, designed by award-winning Irish architecture firm Heneghan Peng, show a three-story high glass facade overlooking a two-kilometer stretch of desert, with a stunning panorama of the necropolis.

It sits on a 50-meter-high sandy hill, which would have proved too unsteady for the ancients to build on, to minimize the chances of building over undiscovered artifacts. The side along the Alexandria-Desert Road will be faced in alabaster, and from the main road it will look like, in the words of the architects, “a new ‘edge’ to the [Giza] plateau, a surface defined by a veil of translucent stone that transforms from day to night.”

After entering, guests will move through what Tawfik descibes as the “five wows” of the museum.

The first is the 35-meter-high atrium that houses the 14-meter-tall statue of Ramses II, which formerly stood in Ramses Square. After passing through the atrium, visitors move to the grand staircase, adorned with more than 100 sculptures, that ascends 24 meters to the main exhibition halls. At the top of the stairs is the third wow— a clear view of the pyramids through the great glass entrance facade. Turning left here, still with a panoramic view of the Giza Plateau, you encounter wow number four, the Tutankhamun exhibit, the museum’s largest. According to Tawfik, up until now only a third of the items, some 1,700 pieces, belonging to this 18th-dynasty pharaoh have been put on display.

The complete collection numbers closer to 5,000 items.

The fifth and final highlight is

the second solar boat of King Khufu, which has never been displayed before. Not to be confused with the vessel that occupies the Giza Solar Boat Museum along the south face of the Great Pyramid, the boat destined for the GEM is, in a sense, its sister ship. Built for the same fourth-dynasty pharaoh, they were excavated together from the Giza Plateau in 1954. The solar boat exhibit won't be ready until some time after opening, however, as it will take three years to restore and reassemble the fourand-a-half-millennia-old vessel before it can take pride of place among the 50,000 other artifacts on display.

The GEM “is not just a museum,” adds Tawfik. In addition to the exhibitions themselves, the site includes plans for a boutique hotel, a conference center accommodating up to 1,000 guests, and retail space for 10 restaurants and even more shops. By renting out this commercial real estate, says Tawfik, the museum will not only provide a variety of ways to entertain its guests but will also earn enough to support its operations.

Compared to the Egyptian Museum in Tahrir Square, where the standard adult tourist admission price is LE 60, tickets for the GEM will run $15 to $20.

The museum will not be staterun but managed instead by a private company in what appears to be a recent trend in Egypt’s approach to heritage sites. Last year, it was announced that the Egyptian Tourism Authority would be turning over management of the pyramids to the private sector as part of the LE 349-million Pyramids Development Project, which aims to introduce new attractions and security measures to the Giza Plateau. It is part of an

Business Monthly – March 2017 I

45

Heritage

effort to turn around the site’s grim reputation as a hotbed of harassment from the in-your-face tourist touts hawking souvenirs and camel rides. Tawfik believes that the thousands of jobs the GEM creates “will revitalize the surrounding area” and suck manpower away from the informal souvenir economy—making a day at the pyramids a more visitor-friendly experience.

On the top of that, the whole area will get an infrastructure revamp, with the Cairo-Alexandria Desert Road doubling in width to accommodate the extra tourist traffic. The Giza Plateau is also evetually supposed to get its own Metro station on the yet-to-be-built line 4, which Tawfik has dubbed a “Giza-Cairo cultural trail,” which will carry passengers across Greater Cairo through downtown and on to National Museum of Egyptian Civilization in Old Cairo.

Whether the mammoth project can succeed in bringing back tourists is another question. The museum will feature tight security—including a “buffer zone” that keeps vehicles away from the buildings to protect against car bombs, an increase in guards and a new, heavily fortified gate to the Giza Plateau. Already jittery tourists kept away following the crash of a Russian passenger jet over the Sinai Peninsula in October 2015, after which many European carriers cancelled flights to Sharm el-Sheikh, Egypt’s tourism capital. While many countries have since resumed flights to Sharm, two of of the biggest sources of inbound tourists—Russia and the United Kingdom—have yet to lift their bans. Many governments also continue to warn their citizens about the risk of terrorism in Egypt. Six years after the first protests took place in Tahrir Square, tourist numbers are down to about a third of what they once were, and most of those come for the beaches; only a minority come for the museums. The Ministry of Tourism reports that cultural tourism makes up only 5 percent of total visitors. Heritage sites like the pyramids and the Valley of the Kings in Luxor suffered dwindling numbers before the revolution but have seen an even more precipitous drop since then. In 2014, the antiquities minister reported that revenue for cultural sites had dropped 95 percent since 2011.

Nevertheless, Tawfik dismisses what he calls “pessimistic” studies on the museum’s prospects. “I don’t care about them anymore,” he says without specifying who carried them out. By 2020, he expects to be welcoming a handsome 8 million visitors annually, which would make the GEM the most-visited museum in the world—an ambitious target, considering that the total number of foreign visitors to Egypt last year was less than 5 million. The team is only just starting to promote the museum, preparing the auction of 1,000 tickets for opening night, whenever that might be. Whenever the finish date is confirmed, an international promotional campaign will be launched, says Tawfik. “We’re waiting for our opening date,” he says, “then we can start really making noise.” ■

46

I

Business Monthly – March 2017

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

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 Zeinab Hashim, Abu Dhabi Islamic Bank (ADIB)

VICE PRESIDENT, MEMBERSHIP Amr Allam, Misr Sons Development – Hassan Allam Sons

PAST PRESIDENT M. Gamal Moharam, MGM Financial & Banking Consultants

VICE PRESIDENT, PROGRAMS Tarek Tawfik, International Company for Agricultural Production & Processing

ADVISOR TO THE BOARD Hisham A. Fahmy

VICE PRESIDENT, LEGAL AFFAIRS Said Hanafi, Orascom Hotels & Development

COMMITTEE LEADERS

CHIEF EXECUTIVE OFFICER Sylvia Menassa

(July 2016 to June 2017)

Insurance Chair: Alaa El-Zoheiry, Arab Misr Insurance Group (gig) Co-Chair: Elena Butarova, MetLife Alico (Pharaonic American Life Insurance Co.)

˚

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)

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

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

G

Marketing Chair: Dalia Wahba, CID Consulting Co-Chairs: Karim El Tawil, Orange Tamer El-Araby, Nielsen Egypt

Ç Ç Ç

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

t

Transport and Logistics Chair: Marwan El Sammak, Worms Alexandria Cargo Services Co-Chairs: Ahmed Elfangary, DHL Express Tarek Fahmy, Mediterranean Shipping Company Willfried Wienholt, Siemens

J

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 TRAVEL & TOURISM

The GEM takes shape “The Grand Egyptian Museum is becoming one of the world’s largest museum complexes displaying the artifacts of only one civilization: ancient Egypt,” said Tarek Tawfik, director general of the Grand Egyptian Museum at a Feb. 8 Travel & Tourism Committee meeting titled “The New Grand Egyptian Museum: The World’s Largest Showcase of Heritage.” The long-awaited GEM, which is taking shape on the Giza Plateau just two kilometers from the pyramids, is set to be the world's biggest archaeological museum, housing more than 100,000 artifacts and ancient Egyptian monuments and treasures illustrating the theme of “State, Kingship, Eternity.”

In addition to the museum, the complex will house a conference center, a restaurant and a retail complex as well as stateof-the-art conservation lab and a 23,000-square-meter piazza that can host events and concerts. “The Grand Egyptian Museum will reshape and revitalize the surrounding urban environment,” the director noted, “and promote the building of new hotels, two Metro stations, housing units, parks and basic services that will benefit many low-income communities in the

vicinity of the museum and the Giza pyramids.”

About 41,000 artifacts have already been safely transported to the GEM by trained Egyptian specialists. These include 3,200 items from the tomb of the world famous Tutankhamun, most of which have never been on display before. The museum’s concrete and steel work was completed in January, and Tawfik said the museum will have a partial opening in 2018. “By establishing a global center of Egyptology, the Grand Egyptian Museum will make an important contribution to scholarship, research, conservation and spreading knowledge about the ancient Egyptian history at a national and international level,” he concluded.

MARKETING

Keep it brief Writing good marketing briefs can save both agencies and clients time and money, said Eynas Barakat, founder of the Barakat marketing consultancy, at a Feb. 14 forum sponsored by the AmCham Marketing Committee. The third in the committee’s “Everyday Marketing” workshop series, the meeting was titled “Writing Creative Briefs and Digital Media Marketing.”

Well-written briefs bolster long-term working relationships and enhance a firm’s reputation, said Barakat, who took her audience through the writing process. Good briefs include both communications and administrative components, which constitute the core focus in building and consolidating a brand. They should include key information that takes into account the demographics of the target audience, and they should follow a strategy. Briefs should clearly and concisely present the benefits and key character of a brand. The final stage is the creative presentation of a brief, in which the writer receives evaluation and constructive feedback. Barakat stressed that “big ideas work no matter what.”

Continuing on the same theme, Moataz Kotb, managing director of CultArk, noted: “Effective digital briefs maximize

48

I

Business Monthly – March 2017

returns and benefits of campaigns.” Digital marketing platforms offer an edge, because everything is meticulously quantifiable.

In Egypt, where an average 26 million smartphones connect to the internet every day, he said, content is key. In the digital world, however, briefs must communicate extremely specific goals, which are, in turn, expressed through percentages.

Digital media marketing is successful when budgets are clearly and honestly articulated, for they permit realistic outreach expectations as well as performance measurement. Unlike the “real world,” digital productions allow for flexible and changeable content that’s tailored to different selling points and a variety of audiences who may all be addressed at once.

WOMEN IN BUSINESS

Promoting female empowerment

On Jan. 31 the AmCham Women in Business Committee addressed the issue of diversity in the workplace.

“Career Advancement: Successful Gender Diversity Programs” featured a panel of speakers including Laura Stahl, an advisor for Deutsche Gesellschaft für Internationale Zusammenarbeit, who talked about the group’s Economic Integration of Women in the MENA Region project, which aims to improve business and employment conditions for female workers. Offering a comprehensive outlook on the Middle East region, Stahl added that gender gaps are increasing in the labor market, despite the growth of available female talent.

Cooperating with the private sector is essential, she added.

Ahmed Sultan, human resources manager for the Near East at Procter & Gamble, claimed that effective diversity and inclusion strategies yield benefits for companies. He said the P&G strategy seeks to deliver women better career-family balance via a variety of support mechanisms offered pre- and post-maternity.

This formula currently impacts 42 percent of the company’s staff here in Egypt and allows for the presence of 17 female managers regionally.

Jady Fakhry, talent and leadership manager at Vodafone Egypt, explained the ways in which the company integrates its diversity vision into all its strategies.

The firm’s Reconnect program allows for the rehiring of qualified female personnel who’ve left the workplace to raise a family for as long as a decade. Vodafone focuses on empowering women in middle management and building of a strong potential female leaders.

With its Women Forum launched in 2009, General Motors has sought to retain, motivate, and increase the participation of female employees, said Maisa Galal, the company’s human resources director for Egypt and North Africa. While more women have gradually joined this male-dominant organization, thanks to the leadership having designed modules, communication, mentorship and sponsorship programs to ensure more females in senior positions. GM is on the Global GM Women Council.

Engy Saafan, regional scientific and regulatory affairs manager for Mars, shared the “unique attributes” of her firm’s inclusion mission, which provides its employees with “unprecedented” flexibility, compensation, and security programs.

Business Monthly – March 2017 I

49

Member News BARON HOTELS AND RESORTS Baron Hotels and Resorts has been named one of the top 25 hotel chains in the Middle East by the travel website TripAdvisor. The Baron Palms Resort Sharm elSheikh was also named Most Romantic Resort in the Region, while the Baron Resort Sharm el-Sheikh was recognized for its quality service. The Baron Palace Sahl Hasheesh was also recognized. The German tourism website TUI also cited Baron as a popular regional hotel chain.

FINE HYGIENE HOLDING Fine Hygienic Holding, maker of hygienic paper products, has been awarded an ISEGA certificate, signifying that its products are safe to come into contact with food.

Fine is among a handful of companies in Egypt and Middle East to earn the accreditation from ISEGA, a German institute that specializes in testing and certifying products including paper, plastics and other materials. As part of the certification process, ISEGA conducts various chemical, physical and microbiological tests and analyses on products.

THE FOUR SEASONS The Four Seasons Hotel Cairo at Nile Plaza has appointed Dimitrios Zarikos as its new regional vice president and general manager. A veteran with 27 years of experience, Zarikosi has opened seven hotels including properties in the U.S., France and Canada as well as Egypt. For the past nine years, Zarikos has been based in Toronto, Canada, where he oversaw the opening of the Four Seasons Hotel and Residences Toronto. This is Dimitri’s second assignment in Cairo; he led the opening in 2000 of the Four Seasons Hotel Cairo at First Residence, the first Four Seasons hotel in the Middle East.

CAIRO MARRIOTT HOTEL Omar Tantawy has been appointed general manager of the Cairo Marriott Hotel & Omar Khayyam Casino, becoming the first Egyptian to run the facility. Tantawy, who has been in the hotel business since 1988, has served as the Marriott’s resident manager for the past nine years. Before that he served in various positions at the Sheraton Giza other five-star hotels and chains in Cairo, including Le Meridian and the Grand Hyatt. He was also part of the opening team at the Intercontinental City Stars Hotel.

50

I

Business Monthly – March 2017

New Members Consultancy

Affiliate Members Financial Sector

EDGE Consultants Iman Sabry Founder & CEO

Address: 435 El Nargess Buildings Tel.: (20-10) 0002-9257 Website: www.edgeconsultant.com

Nevine Kashmiry Assistant Chairman & CEO- Corporate Banking, The United Bank Membership Type Associate Resident

Information Technology

Change in Member’s Title:

Khaled Sherif Group Chairperson

Hisham El Shenoufy

FVP Head of Wholesale Banking, Arab Banking Corporation - Egypt (ABC Bank) Membership Type General

Ahmed Mohamed

Business Development Manager, Transmar International Shipping Company

Change in Company Contact Information:

Domiatec Group for Investment & Agriculture Development

Investment Saudi Egyptian Industrial Investment

Address: Zone 12010 , Plots 7, 8, 9, Street 100, El Obour Industrial Zone, Land Mark: Star House & Autovroom

Ahmed Ata Abd-El-Kader General Manager

Address: 9 Abdel Moneim Riad Street, off Al Batal Ahmed Abdel Aziz Street Tel.: (20-2) 3762-0356 Website: www.seii.com.eg

Karim Khorshed CEO, Cequens Telecom

Changes

Cequens Telecom

Address: 21 Mohamed Tawfik Diab Street Tel.: (20-2) 2273-4506 Website: www.cequens.com

Information Technology

Transmar International Shipping Company Membership Type Associate Resident

Address: Plot (45 b), 4th floor , North 90 Street Telephone: (20-2) 2614-2860/1/2 Website: www.Transmar.com

United Group for investment and trade

Address:18/20 El Hejaz Street Phone: (20-3) 592-3477/591-1231/592-9984/592-9985 Fax: 035917055 Website: www.united-git.com

Textiles El-Nasr Clothing & Textiles Co. (Kabo) Amr Mohamed Elsharnoubi Chairman & CEO Address: 407 Canal Al Mahmoudiya Street, El Hadra Fax: (20-3) 428-0695 Website: www.kabo.com.eg

Wadi Holding, SAE

Membership Type General

Address: Capital Business Park, 26th of July Corridor Building B1 Phone: (20-2) 3827-8203/4

Business Monthly – March 2017 I

51

Announcements Jobs AMCHAM RECRUITMENT CENTER Code

Vacancies

Company Name

106247 106224 106514 106375 106501 106457

Business Development Manager Technical Office Manager Quality Assurance Manager Chief Accountant Service Center Manager Treasury Manager

CID Consulting Abraj Misr Pyramids Cosmetics Company Paradise Capital Holding for Financial Investments S.A.E Bavarian Auto Group Tanmeyah Micro Enterprise Services

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

Bid bond Specs fees

Sectors

Repaving of asphalt roads, of walkways & roads platforms at the City Center & at New Urban Societies Authority, New Noubariya City Development Agency, The Cashier subordinated districts. Pre bid meeting set for 3/1/2017.

March 15، 2017

75,000 LE LE 1,000

Construction Projects Local Administration Authorities

Construction of a commercial complex/ administrative complex at the third General Authority for New Urban Societies, New Borgel Arab City Development Agency, The residential district. Pre bed meeting set for 3/5/2017.

Cashier

March 19، 2017

70,000 LE LE 500

Electromechanical Works Local Administration Authorities

H.I.O. - Health Insurance Organization, Beni Swef Branch, The Cashier,

March 13، 2017

70,000 LE LE 500

Electromechanical Works Health Care

Annual maintenance of H.I.O. Branch in Beni Swef.

Beneficiary Sectors

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.

May Energy-Oil

Offshore Technology Conference

www.otcnet.org

Mai Abdelhalim

2797-2146

Environment- Water

WasteExpo 2017

www.wasteexpo.com

Hany Wassef

2797-3422

Restaurants/F&B

NRA Show 2017

www.show.restaurant.org

Rania Mekhail

2797-3487

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.

52 I

Business Monthly – March 2017

Classifieds Benefits DHL EXPRESS

INTERNATIONAL LANGUAGE INSTITUTE (ILI)

DHL Express is proud to offer all AmCham members an exclusive 30% discount on DHL published rates for outbound international shipping services.

N.B: - The discount is not available for domestic shipping.

- The discount is not to be used in conjunction with other promotions from DHL. - Only at DHL locations, no pick up service.

The International Language Institute (ILI) is delighted to offer a 15% discount on English and Arabic courses to AmCham members companies.

For further information about the nearest DHL location visit our website http://www.dhlegypt.com/en.html or call DHL hotline 16345

For more information, please contact: Noha Hefnawy; Nourhan Kabiel Short No.16996 Email: nhefnawy@ihcairo.com; nkabiel@ihcairo.com

*Discounts will be granted for AmCham members upon presenting their AmCham 2017 membership card* Please visit AmCham Cyberlink on http://www.amcham.org.eg/cyberlink for more information for AmCham benefits This offer is valid until December 31, 2017

*Discounts will be granted for AmCham members upon presenting their AmCham 2017 membership card*

Please visit AmCham Cyberlink on http://www.amcham.org.eg/ cyberlink for more information for AmCham benefits This offer is valid until December 30, 2017

MAGRABI GROUP

Magrabi Optical is pleased to extend its offer throughout 2017 to enjoy an exclusive 15% discount on medical frames, sunglasses and lenses for all AmCham members.

*Discounts will be granted for AmCham members upon presenting their AmCham 2017 membership card*

Please visit AmCham Cyberlink on http://www.amcham.org.eg/cyberlink for more information for AmCham benefits This offer is valid until December 31, 2017

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 – March 2017 I

53

Advertorial THE AMERICAN UNIVERSITY IN CAIRO

EXXONMOBIL

Representatives from AUC met with a parliamentary education committee recently to discuss the controversial issue of rising tuition. The university announced that it will grant 173 students emergency scholarships for the spring 2017 semester. A scholarship fund, named for recently deceased banker and alumnus Nevine Loutfy, has been created. In other news, the AUC business school graduated the first batch of students from its AUC Venture Lab FinTech Accelerator, which aims to encourage financial services startups. The university also recently signed an agreement with the National Council for Women pledging to promote female advancement.

ExxonMobil Egypt participated in the 2017 Egypt Petroleum Show, or EGYPS. The event was held in February under the auspices of President Abdel Fattah el-Sisi and the Ministry of Petroleum.

Hesham ElAmroussy, chairman and managing director of ExxonMobil Egypt and lubricant manager for North Africa and Middle East, said the conference would “promote strategic development and future growth in Egypt.” He predicted that EGYPS would attract much-needed foreign investments in the oil-and-gas sector and encourage collaboration between the private sector and the Egyptian government to boost energy production in the country.

AIR FRANCE

TATWEER MISR

Air France celebrated the inaugural run of its new Dreamliner aircraft between Paris and Cairo in January. The Boeing 787 features 30 seats in business class, 21 seats in premium economy and 225 in economy. It flies six times a week between Charles de Gaulle and Cairo International airports. The Dreamliner has inflight Wi-Fi service, with data plans ranging from €5 to €30. The aircraft also has 30-percent larger windows than older planes and an electronic window darkening system instead of shutters.

As part of its 2017 corporate social responsibility strategy, developer Tatweer Misr partnered with the charity group Mashrou El Saada to beautify Heissa, a Nubian island near Aswan, with locally made artwork, sprucing up the community and offering locals to showcase for their work. The project aims to boost the pride and self-esteem of the residents of Heissa and send a positive message to the outsi de world.

Mashrou El Saada, which was founded by Hashem Rafaat in 2013, aims to improve the lives of Egyptians using “color therapy.” The group volunteers to paint the buildings in slums around the country.

54 I

Business Monthly – March 2017

Advertorial MASTERCARD

ORANGE

MasterCard and INJAZ Egypt have launched the MasterCard Women’s Entrepreneurship Program aiming to support young businesswomen. In keeping with President Abdel Fattah el-Sisi’s theme of 2017 being “the year of the Egyptian women,” the competition empowers local female entrepreneurs to pursue their dreams, establish financial independence and grow their businesses by providing them with the necessary business skills, training and mentorships. To kick it off, an opening ceremony was held with Tamer Kashef, manager of MasterCard Egypt; Dahlia Helaly, deputy CEO of INJAZ Egypt; and members of 20 teams of young entrepreneurs, along with mentors and trainers. Businesswomen Fatma Ghaly, the managing director of Egypt Jewels, which owns the Azza Fahmy brand, was also in attendance.

Orange Data announced that it has reached new international certifications in environmental management and occupational health and safety.

The ISO 14001 and the OHSAS 18001 were awarded thanks to Orange Data having increased its performance over the past few years in extending the scope of environmental management, occupational safety and health throughout the company. Mobinil, now Orange Egypt, was the first telecommunications company in the Middle East and North Africa to acquire the ISO 14001 certificate back in 2001. This acknowledgement from international certification entities demonstrates the firm’s commitment to protecting the environment, maintaining natural resources and reducing energy consumption.

INERTIA

L’OREAL

Real estate developer Inertia sponsored Aswan42, a marathon held in Aswan in conjunction with the Magdi Yacoub Heart Foundation and event planner TriFactory. In addition to the 42-kilometer run, the event featured a half-marathon and a 10-kilometer race, while children 10 and under took part in a two-kilometer race. A significant portion of proceeds from the races, which largely followed routes along the banks of the Nile, will be donated to the Aswan Heart Center, which treats children suffering from heart conditions. The event was also meant to promote Aswan as a global tourist destination.

L’Oreal Egypt has announced the launch of its L’Oreal-UNESCO for Women Science Award for 2017 to promote scientific research conducted by women from Egypt and the Levant region. Now in its 19th year, the program has recognized 2,530 female scientists, with more than 2,400 have receiving scholarships to study at 112 universities around the world. At the global level, L’Oreal has in total honored 90 wo men from Arab world, including 14 Egyptian women. Each year, the program awards five female scientists €10,000 to advance their work and gives scholarships to over 230 other female science scholars.

Business Monthly – March 2017 I

55

Media Lite

A Glance At The Press

The pound goes up

"I can’t climb, I’m out of shape."

Al-Masry Al-Youm, Feb. 22 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.

DEAD TO RIGHTS A building owner in Port Said who was deathly afraid of being cited by the law for illegal additions to his property hatched an elaborate scheme. Thanks to a secret informant, the landlord knew when the authorities were coming to seize the building.

Thus warned, his tenants would spring into action, and the police would arrive to find a closed casket in the lobby surrounded by a sombre-faced group of “undertakers,” who were supposedly preparing to transport the “deceased.” For added effect, female residents dressed in black would meanwhile sob loudly on a nearby balcony. The performance was so convincing that it wasn’t until their fourth trip to seize the building that the cops once again arrived to find grieving residents and finally became suspicious.

When they opened the empty casket, the landlord may have felt like climbing inside.

Al-Ahram, Feb. 8

56

I

Business Monthly – March 2017

SHOOTING THE MESSENGER An Old Cairo café was doing a brisk business serving shisha pipes fashioned to look like machine guns— until the ersatz automatic weapons caught the attention of local police, who decided to start sniffing around the gun-themed ahwa. Sure enough, authorities claim they found customers smoking illicit substances in the imported shishas, which are fashioned in gold and black to resemble AK-47s—the “mob hookah” retails on Amazon.com in the United States for $127.99. Indeed, the café owner argued that he offered the shishas simply as a novelty item, adding that they’d proved so popular that he had ordered more weapon-themed water pipes, with some resembling grenades.

Al-Masry Al-Youm, Feb. 12

THAT’S NUTS Controversial TV presenter Amr Adib has identified the cause of five years of economic malaise, a declining currency and skyrocketing inflation—nuts. On a recent edition of his show, “Kol Youm,” Adib explained that the slight strengthening of the beleaguered Egyptian pound in recent weeks is due to the fact that Egyptians haven’t been consuming as many imported almonds and cashews. With Ramadan right around the corner, however, Adib predicts the arrival of the holiday season will single-handedly drive the price of the dollar back up by LE 2. Another culprit: all those Chinese-made Ramadan lanterns shaped like Mickey Mouse.

Adib didn’t provide any explanation for singling out nuts and lanterns, but he did say the fact the pound was going up rather than down finally was a “historic moment.”

Cairo Scene, Feb. 21

Finance can no longer be disconnected from the environment & the society MOSTADAM is the first platform to instill Sustainable Finance in Egypt and the MENA region through capacity building & advocacy

In cooperation with

For inquiries: mostadam@aaib.com or visit us on: aaib.com