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Capital Group Properties announces the launch of Phase One of Alburouj: Acamar Acamar offers fully finished Townhomes, Duplex Units and Apartments, over payment terms of 5, 6 & 8 years. Acamar is a gated community for privacy in perfect tune with the greater community surrounding it. The Perfect Integrated Community accommodates international and domestic market pioneers, such as: Smart Villages, Cadmus International School, managed by SABIS which owns Al Choueifat International Schools, Capital Health Clinics by Redcon Medical Parks, El Sawy Culture Wheel, and The Orchard Park operated by Bustan Aquaponics. The project is located in East Cairo, 20 minutes away from Heliopolis, and 15 minutes away from New Cairo & the New Capital Cairo.
For more information: 19333 I alburouj.com
Al Ahli Bank of Kuwait officially launches its operations in Egypt Cairo, Egypt, 3rd November 2016: Al Ahli Bank of Kuwait announced today the official launch of its operations in Egypt through its subsidiary “Al Ahli Bank of Kuwait – Egypt” and inaugurated its Zamalek Flagship branch and Smart Village Headquarters. This follows the rebranding of the Bank after its recent acquisition of Piraeus Bank Egypt (PBE). The ribbon cutting ceremony to celebrate the occasion was attended by Ms. Mai Abulnaga, Assistant Sub Governor - Central Bank of Egypt Governor's Office, Mr. Ali Ebrahim Marafi - Chairman of ABK - Egypt, Mr. Michel Accad, Group CEO, Mr. Khaled El Salawy, CEO – Egypt, Mr. Abdullah Alsumait, Deputy Chief General Manager – ABK Kuwait, Board Members and Management representatives. Speaking at the inauguration, Mr. Ali Marafi, Chairman of ABK – Egypt, said: “It is a great moment for ABK to inaugurate our Headquarters in Smart Village as well as our Zamalek Flagship Branch, and we are delighted to officially launch our operations in Egypt.” Mr. Marafi added, “The acquisition of PBE is in line with ABK’s vision of expanding into foreign markets. Egypt, with its well-regulated yet underpenetrated banking market has been a main focus area and the Bank is very proud to have now become an important part of Egypt’s banking industry. We are looking forward to increase our business and support the Egyptian economy, with the Bank’s strong presence and reputation for quality, customer service and reliability in the region.” Mr. Khaled El Salawy, ABK - Egypt CEO, stated: “ABK - Egypt is strongly committed to its role in supporting the Egyptian economy through a clearly defined strategy that is founded on supporting and financing Corporate and SME clients in various industries with innovative financial solutions. We will also drive focus on the retail segment through a diversified portfolio of products and services that cater to customers’ growing needs.” Strategically located on the 26th of July Street in Zamalek, the Flagship branch is the first of the 39 branches to be revamped alongside the Headquarters in Smart Village. The remaining branches will be fully rebranded over the course of 2016. For more details about ABK - Egypt branches, products and banking solutions, please call 19322 or visit our website: www.abkegypt.com
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n a spectacular celebration at the Royal Maxim Kempinski hotel in Cairo, OPPO celebrated the launch of its latest addition to its F series, the photography-focused OPPO F1s. The mega celebration was attended by glamorous guests and public figures; OPPO officials headed by their Vice President and Managing Director of International Mobile Business, Sky Li; and a number of regional and local press and media personalities. As well as launching the stylish F1s, OPPO also announced its ambitions to grow the brand locally through the establishment of a dedicated marketing center for the Middle East and North African (MENA) markets. The celebration was hosted by famous MC, Razan Maghraby, and featured magnificent entertainment by superstars Janaat and Samo Zain. The attendees enjoyed themselves tremendously and – throughout the event – were able to experience the breathtaking, state-of-the-art, technology of the new OPPO F1s cameras. The new phone offers greater camera features and improved technologies than ever before to ensure users capture every
moment in vivid detail, even in low-light environments. The F1s comes with a 16MP front-facing camera and a 13MP rear camera, both designed to maximize light sensitivity and capture clear and detailed photos, in all lighting situations. In addition to its camera features, the F1s is equipped with OPPO's industry leading 0.22 seconds-to-unlock fingerprint reader and a sizeable 3075 mAh battery. The F1s comes with 32GB of storage, and is powered by an octa-core processor with 3GB of RAM, offering fantastic value and an excellent user experience. “We know local consumers are going to be delighted with this device, from its stunning design to its powerful cameras and secure Touch Access technology, its the complete package,” said Andy Shi, Brand Director, OPPO MENA. “The F1s has proven to be an incredible success across the globe, and we're excited to launch it locally, further building our brand across the region." The new device is currently available throughout the MENA region.
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TAKE YOUR PLACE Among The Elite The exclusive and elite LakeHouse: The Club is truly exceptional in every respect, a select community where membership is the passport to join a privileged few. LakeHouse: The Club draws on the legendary five star excellence of the Dusit Thani LakeView Cairo, located alongside the edge of the high-end and secluded LakeView compound. Membership of LakeHouse: The Club offers select gourmet cuisines, along with indulgence, health and fitness facilities for families, individuals and corporate clients.
All of this is in a captivating setting of gardens and patios where warm breezes rustle the palms. Meanwhile, the cabanas and lounges offer a tempting escape from the cares of city life. LakeHouse is Cairo's oasis; a world that answers every conceivable need or desire. O Café, Puff and Energia are the main restaurants. The lavishly-equipped, professionally-staffed Lakehouse Gym has facilities for squash, tennis, soccer; and two swimming pools one of which is Olympic-sized. These facilities are just part of the story of this exclusive and luxurious environment.
Being a member opens up a world of five-star cuisines with innovative, intriguing and irresistibly tantalizing in its tastes, flavors, aromas and presentation. O Café: 'O' for olives, 'O' for oregano, 'O' for omelets and 'Oooooh'. This luscious but healthy and nutritious cuisine takes inspiration from the eastern Mediterranean recopies. Dishes are prepared in the open kitchen and brought to you at the restaurant's high stools and tables, informal sofa areas or on the outdoor terrace, which overlooks the palms and pools. Where better to enjoy a 'Saloniki' breakfast of scrambled eggs and baby potatoes. Later in the day, maybe order a caviar dip, a choice of five crisp freshly-prepared salads (add salmon or shrimps), or souvlakia with skewered beef, lamb, veal, chicken or shrimp Greek-style. Puff Lounge: With its shady location alongside the pools offers gourmet Lebanese cuisine in a casual and colorful setting. The arabesque motif floor tiles, high stools, tables and sofa areas set around mini gardens conjure an atmosphere of the orient in the heart of New Cairo. Chat or watch the large-screen TVs as you smoke our signature shisha. Energia: Located alongside the Gym, Energia is a heaven and haven for the health conscious. The café offers protein shakes whether it be for mass builders or healthy and hearty choices such as chicken and coconut soup, salads, wraps and a 400g 'protein fix' of beef, veal, chicken or lamb. Now that's worth working out for!
HEALTH &FITNESS As Never Before
The Body Temple and the indoor and outdoor recreation facilities for families, children and adults take LakeHouse members’ health, relaxation and fitness to unrivalled heights. The floor-to-ceiling panoramic window on the upper floor of The Lakehouse Gym gives members a view over the patios, palms, lawns, cabanas and swimming pools. The Gym has over 20 crossfit trainers, treadmills, exercise bikes and a spinning room with 20 GX bikes. There are zones for stretching, cardio, free weights, strength programs and circuit training. Personal trainers customize members' individual sessions. In addition to soccer and tennis academies, three squash courts with banked spectator seating offer a top-rated facility for competitions and corporate ' bonding' days. For the kids: We will soon be opening the Kids' Recreational Area for three to eight year-olds, a professionally-staffed expansive play zone for children, while parents enjoy the Body Temple facilities or a quiet meal by the pool. Coming soon: The LakeHouse Horizon is a water park with new thrills and excitement
N OV E M B E R 2 0 1 6 VOLUME 33
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ISSUE 11
Cover Stor y Going up American businesses pay Egypt a visit.
Cover Design: Nessim N. Hanna
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Inside 14
Editor’s Note
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Viewpoint
The Newsroom 18
In Brief The news in a nutshell
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Region Notes News from around the region
© Copyright Business Monthly 2016. All rights reserved. No part of this magazine may be reproduced without the prior written consent of the editor. The opinions expressed in Business Monthly do not necessarily reflect the views of the American Chamber of Commerce in Egypt.
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3 D AYS A U TO M AT I C ACC I A I O - 4 5 M M ( R E F. 674 )
G I Z A . FI RST MALL . SH O P N O. 104 . (+202 ) 357 1 7474 MI RAGE CIT Y . J W MAR R IOT T H OTEL . (+202 ) 241 1 14 4 4
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Market Watch
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Stock Analysis The F word
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Capital Markets A glance at stocks and bonds
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Money & Banking Forex and deposits
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Key Indicators The economy at a glance
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Egypt-U.S. Trade Imports and exports
In Depth 24
Working on the railroad The decrepit state of Egyptian trains
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Egypt looks to the private sector to manage the past Maximizing returns from our national heritage
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Business Monthly – November 2016
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Executive Life 48
Dining Out Going east
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Gadgets Home smart home
The Chamber
Corporate Clinic
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Events
Are we really here? Debating the simulated universe hypothesis
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Member News
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New Members
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Classifieds
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Media Lite An irreverent glance at the press
Editor’s Note
SINK OR SWIM
Director of Publications & Research Khaled F. Sewelam
arlier this month, the Central Bank of Egypt surprised everyone by doing what economists and the private sector had been pushing it to do for ages—it floated the pound. On Nov. 3, the CBE suddenly devalued the local currency to LE 13 to the dollar from the bank rate of LE 8.8 before allowing it to slide further according to the whims of the market. It was a brave move. Finally, Egypt’s leaders showed that they were willing to take the political heat for economic measures that, by nearly all accounts, are painful but necessary if they want to turn things around after five increasingly lean years. The IMF and the World Bank cheered the float, and a statement from U.S. Secretary of State John Kerry praised the Egyptian government for “making the difficult decisions needed to move their country towards prosperity.” It also carried more than a whiff of desperation. Last month, as sugar disappeared from shelves—the latest casualty of Egypt’s hard-currency shortage—and the price of the dollar soared to an unprecedented LE 18 on the black market, fed-up importers boycotted the currency trade, saying they simply could not afford to pass on the extra cost to already stretched consumers. In the brief respite of exchange-rate sanity that ensued, as the pound strengthened to around LE 13 on the parallel market, Egypt’s decision-makers apparently saw a brief window of opportunity and decided to put it all on red. They’re betting that unshackling the pound (along with raising interest rates and lifting fees) will motivate people to cash in the dollars they’ve got stashed under their mattresses (and in overseas accounts). If the banks can drum up enough liquidity—with the help of $12 billion that should begin to arrive imminently from the IMF—it will stamp out the currency black market and stabilize the exchange rate, restoring the confidence of foreign investors. But it’s going to take a while for that to happen, even if the strategy works. In the meantime, sticker shock has gripped everyone from patrons of international schools to microbus riders— especially after the government, acting with uncharacteristic speed, hiked fuel prices just hours after announcing the float. This widespread sense of sudden panic comes despite the fact that the weaker pound has long since taken its toll on prices, since virtually no one except the government has been able to buy dollars at the bank rate for imported goods and supplies for many months. Now officials can no longer blame greedy currency traders for the skyrocketing price of the dollar. Whether the float finally helps put Egypt’s economy on the road to recovery remains to be seen. In the meantime, as one local executive summed it up for Reuters: “Now at least we have the lights turned on.”
Contributing Editors Kate Durham Tamer Hafez
Editor-in-Chief Rachel Scheier
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Staff Writer Edmund Bower Contributing Writer Mustafa Zafar Senior Art Director Nessim N. Hanna Graphic Designer Emy Emile Advertising & Business Development Director Amany Kassem Advertising Coordinator Nada Auf Photographers Soha El Gabi Said Abdelmessih Production Supervisor Hany Elias Market Watch Analyst Amr Hussein Elalfy Chamber News Contacts Nada Abdalla, Azza Sherif, Susanne Winkler
R ACHEL S CHEIER
U.S. address: 1615 H Street, NW • Washington, D.C. 20062 Please forward your comments or suggestions to the Egypt editorial office:
Business Monthly
American Chamber of Commerce in Egypt 33 Soliman Abaza Street, Dokki 12311 • Cairo • Egypt Tel: (20-2) 3338-1050 • Fax: (20-2) 3338-0850 E-mail: publications@amcham.org.eg www.amcham.org.eg/bmonthly CTP and printing: Sahara Printing Company, SAE – Nasr City Free Zone
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Powering sustainable transportation? Increasing concern for the environment, rapid urbanization, the need to move more people and freight faster and volatile fuel prices make rail a strategic focus sector for ABB. The company oers a range of power and automation products and solutions for the rail and transport sector. To manage energy eďŹƒciency, reduce carbon emissions and bring savings to train manufacturers, railway operators and infrastructure managers. www.abb.com/railway
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Certainly
Viewpoint
RECOVERY PATH
T
he implementation of economic theory is influenced by politics, public pressure, political will and market forces. Economists might differ in their views and proposed solutions to national crises and investment policy; however, they all must play within the same parameters and recognize facts and reality. One of the universally accepted facts is that unemployment and underemployment play a major role in social unrest and are always followed by reduced production due to the deterioration of the business environment and the overall economy. This vicious cycle is hard to break, particularly in developing countries, which do not have the resources necessary to create jobs at an adequate speed. The resource gap has to be compensated for by foreign direct investment, or FDI. The attraction of FDI implies the creation of an investment friendly climate, supported by an awareness campaign highlighting market incentives and edges. Market exit considerations are more important than ease of entry or lack thereof, and I do not mean to underestimate the cost and aggravation associated with operation problems as, in the real world, most of these issues can be overcome with the help of local experts, at a reasonable cost, while exit impediments are harder due to their sovereign nature. During the past two years, the Egyptian government has embarked on an aggressive program aimed at solving investors’ problems ranging from the fair implementation of the rule of law to curtailing bureaucratic hurdles, in addition to logistics, power and the endemic issue of tricky land availability as well as convertibility, clear ease of exit and bankruptcy procedures.
One of the most significant landmarks on the road to economic recovery is the ongoing effort to finalize the IMF agreement, which will give the financial world a vote of confidence and solve the monetary issues standing in the way of investment. The creation of an investment advisory board is also a step in the right direction. We at AmCham always do our best to encourage investment and play a constructive role in the promotion of trade between the United States and Egypt. It is in keeping with our mandate that, in collaboration with the U.S. Chamber of Commerce, the U.S.-Egypt Business Council and the EgyptU.S. Business Council, we hosted at the end of last month a delegation comprising 55 U.S. firms interested either in further developing their Egyptian investment or exploring new ventures in our country. It is important to recognize that the delegation was headed by Ambassador David Thorne, senior advisor to the U.S. secretary of state, to emphasize the support of the U.S. government. President Abdel Fattah el-Sisi offered to meet in person with representatives of the visiting companies to confirm the country’s commitment and his personal eagerness to support private sector efforts. Several cabinet ministers participated in the two days of functions as speakers and on panels to clarify ongoing programs, answer questions and listen to ideas and concerns brought to their attention by our visitors. I am optimistic about the path forward, fully recognizing the sour pills we need to swallow and the strict disciplinary measures we should respect to overcome the current hardships. We need to remain focused and on track in the right direction, without losing hope in the bright future that can be reached. A NIS A. A CLIMANDOS President, AmCham Egypt
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In a surprise move that aimed to quash the black market currency trade and attract much-needed foreign capital, the Central Bank of Egypt floated the pound Nov. 3. The Bank began the dramatic move by devaluing the currency from LE 8.8 to LE 13 to the dollar before allowing it to fall further in a $98.7 million auction later that day, ditching a peg to the U.S. dollar that has drained foreign currency reserves and fed a booming parallel market that had seen the pound drop to a record low of LE 18 last month, double the official bank rate. The CBE simultaneously hiked interest rates by 300 basis points and directed banks to remain open extra hours in an attempt to draw hard currency back into the system. The stock market soared on the news of the float, and the news was lauded by the World Bank and the IMF, which issued a statement predicting that the free market exchange rate would “improve Egypt's external competitiveness, support exports and tourism and attract foreign investment." Egypt is hoping that the float and a raft of other economic reforms will help finalize a $12-billion IMF loan to help restore investor confidence in the country’s battered economy. However, it also gave rise to widespread fears about rocketing
Growth likely to fall, Missing gov’t target Egypt’s economy is likely to grow 3.5 percent during the 2016/17 fiscal year, missing the government's target of around 5 percent and falling below last year’s growth rate, according to a survey of analysts conducted by Reuters. The poll, which surveyed 17 experts, predicted that growth the following year would inch up only slightly, to 3.7 percent. Economic growth in the 2015/16 financial year, which ended in June, was around 4.2 percent, according to the Ministry of Finance. “Real GDP growth was unexpectedly high in 2015/16 considering the sharp downturn in tourism and severe forex shortages,” said Jacques
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SOHA EL GABI
Central Bank floats the pound
prices at a time when inflation recently hit a nine-year high. In a news conference, Prime Minister Sherif Ismail called such austerity measures painful but necessary. “The luxury of delay is not available,” he said.
Verreynne, an analyst at NKC African. Still, it also fell short of the government’s 5.5-percent target for the period. Egypt’s recovery since the economic turmoil following 2011 has been hampered by a worsening dollar shortage, which has crippled its heavily import-dependent private sector.
Telecoms decide to buy 4G licenses after all
After initially refusing the government’s offer to purchase licenses enabling them to offer fourth-generation mobile service, all three local telecoms agreed to the deals. Egypt’s three telecoms— Orange, Vodafone and Etisalat—had originally turned down the licenses,
saying the state wasn’t offering enough radio spectrum to enable them to provide high-quality 4G speeds. Telecom Egypt, the state-owned fixed-line monopoly, was the only company to take up the state’s original offer, buying a 4G license in August for just over 7 billion Egyptian pounds, as it seeks to enter the mobile market. But early last month, Orange agreed to pay Egypt $484 million for the license after telecom regulators amended conditions, enabling the firms to buy more spectrum, reported Reuters. Vodafone and Etisalat followed suit a few days later. Egypt is looking to the sale of the 4G licenses as part of its efforts to reform the telecom sector and raise muchneeded dollars for public coffers.
In Brief
The government hit Egyptians with a double-whammy by raising fuel prices 30-47 percent the day after a free-market currency float saw the official value of the pound plummet nearly 50 percent in one day. Long lines formed at gas stations across Cairo on the evening of Nov. 3, as local news outlets reported that, at midnight, the price of petrol at the pumps would jump 31 percent for diesel, which went from LE 1.80 a liter to LE 2.35; 35 percent for 92 octane petrol, which rose from LE 2.60 to LE 3.50; and 47 percent for 80 octane petrol, which went up from LE 1.60 a liter to LE 2.35, according to Reuters. The increase in fuel prices marked the second such hike in the last few years, following a 2014 increase of up to 78 percent in an effort to reduce the government’s swelling energy subsidies bill. At the time, President Abdel Fattah el-Sisi pledged to cut fuel subsidies completely within five years, ridding the country of an expensive and wasteful regime that economists and international agencies like the IMF have been pushing Egypt to abolish for years. However, a fall in global oil prices had postponed the move. Food and fuel subsidies together eat up around a quarter of government spending. At a news conference, officials said they would increase food subsidies for smart card holders in an attempt to compensate for rising prices.
Growing bitterness over sugar shortage
Officials scrambled to address a sugar shortage, fixing prices and increasing imports despite Egypt’s scarce dollars and soaring global prices of the sweetener. As sugar all but disappeared from store shelves, the government blamed local traders and factories for hoarding the staple to drive up the price, seizing thousands of tons of sugar from Edita Food Industries Oct. 23, halting
SOHA ELGABI
Fuel prices rise
OFFICIALS HIKED FUEL PRICES 30-47 PERCENT ON NOV 4.
operations at one of Egypt’s largest snack producers for several days before officials returned it, Reuters reported. Meanwhile, the General Authority for Supply Commodities announced it had bought 134,000 tons of sugar in an Oct. 15 tender, with contracts to import another 450,000 tons, while the government also promised to create stockpiles that will last six months, according to Bloomberg. The supply ministry said the government plans to pump 50,000 tons of sugar into the market at LE 5 per kilogram for subsidized card holders and LE 7 per kilogram for industry.
PMI hits record low Business activity in Egypt hit its lowest level in more than three years in October, shrinking for a 13th month amid a foreign currency shortage, a weakening pound and accelerating inflation, according to businesses surveyed for the October edition of the Emirates NBD Purchasing Managers’ Index. The PMI for non-oil business activity fell to 42 from 46.3 the previous month, the weakest since July 2013. Any score below 50 represents shrinking business activity.
The survey “highlights the increasingly difficult operating environment confronting Egyptian private-sector firms,” said Emirates NBD senior economist Jean-Paul Pigat in the report. “It is difficult to see the situation improving before an IMF agreement is signed, as the ongoing FX shortage and EGP weakness on the parallel market are the main factors undermining economic output at the moment.”
Poverty gets worse in 2015 Egypt’s poverty rate has risen from just above 25 percent on the eve of the 2011 revolution to 27.8 percent in 2015, reported state statistics agency CAPMAS. Egyptians living below the poverty line currently bring in LE 482 or less, stated the agency in a report. Meanwhile, the number of citizens living in “extreme poverty,”—meaning they live on less than LE 322 per month— reached 5.3 percent due to a spike in the prices of essential foods. The report showed a strong inverse correlation between wealth and family size: just 6 percent of families with less than four members are poor, while the proportion jumped to 44
Business Monthly – November 2016
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In Brief
STREET SENSE What is outgoing U.S. President Barack Obama’s legacy in Egypt? He started off well, with that 2009 speech at Cairo University about the importance of the region to the United States. We thought that U.S. policies would be different this time around, offering more support to Arab countries. But there was no change. After 2011 and 2013, Obama's political stances were predictable: first he backed Morsi’s regime, then when it was apparent it would fall, he endorsed the new one. Ahmed Kamel, 47, showroom manager
In the United States, President Obama was behind several good laws that benefited the average American—like Obamacare. But on the international front, he did very little, and what he did do—like fight the Islamic State—was half-hearted. This was even more evident in his second term, when it felt like he was just cruising along to get to the end. In 50 years, he will be remembered as the only American president to come to Egypt and speak at Cairo University; he was black, and he had a distant Muslim lineage. Saleh Abdel-Tawab, 65, retired international agency worker I will remember him as the most two-faced president in U.S. history. Early on, he came to Egypt and spoke with great conviction about how important the Muslim world was to the United States, and how the heart of it was Egypt. Then when we, the people, ousted Mubarak—and later Morsi—he firmly stood against our uprisings, and he only conceded when he saw that there was no hope for those regimes. Ever since president Sisi, the U.S. has been fighting to keep our economy down, because the administration doesn't like that the Egyptian people picked an Army man. Tamer Saleh, 28, accountant He follows in the footsteps of his predecessors. The U.S. has always wanted to keep the Egyptian people down—and without a voice—because they know that if we rise up, we will be stronger than the United States and will crush Israel. We had hoped that he would be different, but he wasn't. I really hope Trump wins; at least his policies are clear from the start. Gamal Abdel Salam, 25, security guard He is the most forgettable U.S. president ever. His focus was mainly on domestic priorities. I don't blame him, because he came at such a difficult time for the U.S. economy. But it was just such a massive disappointment, given how he painted such a rosy picture at the beginning about the U.S. role in supporting the region. Dalia Hamza, 29, graduate student The policies of the U.S. under Obama were very much about keeping the political status quo in the region. In other words, he wanted to keep the Middle East under dictatorships, because this has long served U.S. interests. The U.S. doesn't want a strong Middle East. In Egypt, the Obama administration always supported the regime in place and was against the will of the people. Now that we have the president we want, the U.S. is trying to keep Egypt’s economy down. Heba Farahat, 25, restaurant worker
COMPILED BY TAMER HAFEZ
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He really had no impact. In fact, I believe U.S. influence in the region was greatly diminished under his leadership. Even Israel didn't benefit as much as it used to from its U.S. alliance under the Obama administration. The United States is no longer "Mama America," as we used to call her. Amany Galal, 41, housewife
SAUDI ARABIA CANCELED OIL SHIPMENTS TO EGYPT AS RELATIONS BETWEEN THE TWO SOURED.
percent for families with six to seven members. Three-quarters of Egyptian families with 10 members or more are living below the poverty line.
Saudi oil aid halted following Syria spat Saudi Arabia’s decision to abruptly halt a scheduled shipment of oil to Egypt early last month raised uncertainty about the ongoing relationship with one of the country’s major financial benefactors, stoking fears about a deepening rift between the two nations that could further imperil Egypt’s struggling economy. Egypt’s wealthy Gulf neighbor agreed in April to a $23-million aid package that included shipping 700,000 tons of fuel monthly for five years. But shortly after Egypt voted Oct. 8 in favor of a Russian-backed United Nations resolution on Syria that Saudi Arabia strongly opposed, Egyptian officials reported that Aramco, the state-owned Saudi oil company, told Cairo that it had halted this month’s shipment. The Saudis didn’t provide a reason or a timeline for the suspension, which forced the Egyptian General Petroleum Corp. to
Business Monthly – November 2016
issue urgent tenders to make up the fuel from other sources. In a speech, President Abdel Fattah el-Sisi denied that Egypt's position on Syria was the reason for the fuel cut-off but added that Egypt “would not bow to anyone but God.”
Egypt improves in Doing Business 2017 Egypt inched up nine spots in the World Bank’s latest Doing Business index, coming in 122nd among 190 countries, compared to last year’s ranking of 131st out of 189. The World Bank attributes the bump to improvements made in the ease of starting a business, in which Egypt now ranks 39th, compared to last year’s 73rd. The report also praises the country’s continuing efforts to improve its “onestop shop,” with particular attention paid to the introduction of a dedicated unit for easing interactions between government bodies and entrepreneurs. The Bank rated New Zealand the easiest nation in which to do business and Somalia the most difficult, while the UAE scored the highest in the region. ■
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Region Notes Caspian Sea
Black Sea
TURKEY
TUNISIA
MOROCCO
Mediterranean Sea
CYPRUS LEBANON
SYRIA
IRAN
IRAQ
ISRAEL JORDAN LEBANON
ALGERIA LIBYA
SYRIA
KUWAIT PALESTINIAN TERRITORIES
ISRAEL EGYPT JORDAN
Persian Gulf
BAHRAIN QATAR
UAE
SAUDI ARABIA
OMAN
Red Sea SUDAN
YEMEN
Arabian Sea
SOUTH SUDAN SUDAN
Map intended for illustrative purposes only and may not accurately depict national boundaries or disputed territories.
Atlantic Ocean
■ Libya’s economy near collapse, says World Bank The World Bank described Libya’s economy as “near collapse” as a civil conflict prevents it from fully exploiting its oil wealth. In an October report, the Bank wrote that declining oil revenues, which have shrunk to a fifth of their potential, have contributed to a rapidly declining local currency and rocketing prices. Five years after the uprising that toppled dictator Muammar Gadhafi, the country remains fragmented, with the United Nations-backed unity government vying with anti-Gadhafi rebels for power along with various Islamist groups. In the meantime, the economy has ground to a halt. Before 2011, when the country dissolved into civil war, Libya was pumping close to two million barrels of oil a day, accounting for 97 percent of its exports and 80 percent of the country’s GDP. During the first six months of 2016, production had plummeted to around 335,000 barrels a day.
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■ Saudi capital spending drops Saudi Arabia is cutting capital spending by 71 percent, as the world’s biggest petroleum exporter implements austerity measures in the wake of low oil prices. Capital expenditure this year is projected to fall to 75.8 billion riyals ($2.2 billion), down from 263.7 billion riyals last year and 370 billion riyals in 2014. Saudi Arabia, which relies on oil for 75 percent of its revenue, is currently running the largest budget shortfall among the world’s top 20 economies. Last year, the country was forced to dip into foreign currency reserves and issue sovereign bonds to cover the deficit. Recently, the country has delayed payments to contractors and is considering the cancellation of more than $20 billion worth of projects, sources told Bloomberg. The government also suspended bonuses and trimmed allowances for public employees, including a 20 percent cut to ministers’ salaries. Officials predict that the budget deficit will decline to 13.5 percent of GDP this year, down from 15 percent in 2015.
Business Monthly – November 2016
■ World Bank loans Jordan $300 Indian Ocean million to help with refugees The World Bank approved a $300 million loan to Jordan to help the country cope with Syrian refugees. The loan is supposed to help more Syrians receive work permits and “access formal jobs and decent labor conditions,” wrote the Bank in a statement. Jordan, a country of just 8.2 million, has been among the hardest hit by an onslaught of citizens seeking refuge from the civil war in neighboring Syria. Amman says the country currently hosts nearly 1.4 million refugees, some 600,000 of whom are registered with the United Nations. Jordan’s leaders have complained of a lack of international aid to help deal with the refugees, reported Al Monitor. In early September, the UN denounced the living conditions of some 70,000 Syrian refugees stranded at the border, where Jordan had blocked their entry after a suicide bombing by the Islamic State killed seven Jordanian soldiers. ■
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BUSINESS MONTHLY ARCHIVES
TRAINS
WORKING ON THE RAILROAD BY TAMER HAFEZ
C
airo’s main cargo railway station in Shubra is a train cemetery, packed with dilapidated cars and stripped locomotives. Or that’s what it looks like to Abdel Sattar el Hefnawy, a 59-year-old platform manager who has worked there since he was a teenager. The station’s internal communications system hasn’t worked for almost a year-and-a-half, so conductors have to use their cell phones to call ahead to Hefnawy and the other guys manning
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the platforms. “Sometimes, trains have to wait for hours because all the platforms are busy,” he says. Lacking a modern, coordination system, he says, “We’re constantly fearing a big accident.” Indeed, Egypt’s notoriously unreliable, dangerous railway system has not motivated Egyptian businesses to rely on trains to ship goods—even though rail is a far cheaper and more efficient means of moving cargo, particular given the congested and unsafe state of the nation’s roads. Nonetheless, rail freight has shrunk to almost zero in recent years. In
2009, trains moved around 5 percent of Egypt’s freight; by 2015, less than 1 percent was transported by railway. The government’s Sustainable Development Strategy: Egypt Vision 2030 calls for increasing that number to 20 to 25 percent over the next 14 years. In June, parliament rubber stamped an ambitious plan to overhaul the railway system that includes LE 110 million to develop freight. At a press event touting the proposal in July, Minister of Transportation Galal Said said that improving Egypt’s railway network, it
In Depth
would take some of the burden off its crowded highways. In particular, heavy, bulky goods such as minerals, petroleum and imported wheat are much more efficiently moved by rail. “One train can carry the same size load as a whole fleet of trucks,” says Hany Mekky, head of United Grains (UniGreen), a grain storage firm. Rail freight is also more cost effective, partly because it uses less fuel, which also makes it a more sustainable form of cargo transport. “A common assessment is that five liters of diesel can transport one ton of goods 550 kilometers by river, 333 kilometers by rail and 100 kilometers by truck,” a former transportation ministry aide told Business Monthly in May. Observers remain skeptical, however. Grand plans to overhaul Egypt’s aging train network have been bandied about for at least a decade—particularly after a tragic train accident in 2002 on the Cairo-Aswan route killed 361 people in one of the deadliest incidents in the history of the railroads. A steady drumbeat of crashes since then has kept the sorry state of the national railway system in the public eye. International agencies have poured millions of dollars into modernizing Egypt’s trains over the last decade, with little in the way of tangible improvements. Everyone agrees they are badly needed. Egypt’s railroad, parts of which opened in 1854, is one of the oldest in the world. By 1900, the network reached from Alexandria to Aswan, and east to the Red Sea. Before the Suez Canal opened in 1856, the railway was a crucial and lucrative link for moving goods between the Mediterranean and the Red Seas. Today there are 9,600 kilometers of track, with the main line running 1,000 kilometers along Egypt’s spine, the Nile valley. Just 20 of the country’s approximately 700 platforms are full-service points where trains can load and unload cargo. In 2013, the transport ministry reported that there were around 550 railway accidents annually. The vast majority of them were minor, but the cost is not. “If there is any unexpected stoppage on the tracks, the shipment is delayed by at least eight hours,” explains Mekky, adding that these delays often forced freight trains to
backtrack or detour or unload their cargo onto trucks. Egypt’s roads are far more dangerous, statistically speaking—but one road crash, or even six, doesn’t risk tying up the nation’s entire national highway infrastructure. In the long run, trains are only efficient when they’re running on a relatively reliable system. Moreover, the hardware is woefully out of date. “The majority of cars and locomotives are not equipped to carry cargo to begin with, and those that can are not equipped with modern safety equipment”—such as GPS systems that see ahead to spot other trains and warn of track problems—”and are not up to spec,” says Mekky. The cargo platforms that do exist are also badly in need of upgrades and are often too small for efficient loading and unloading. Egypt currently has 173 locomotives that can pull 12,000 freight cars ranging from flatbeds and box cars to tanks and other sealed container cars for liquids and hazardous materials, according to the Ministry of Transport. However, a spokeswoman for the Egyptian National Railways, a public agency that operates under the Ministry of Transport, said she was unable to give specifics on how many freight locomotives and cars were currently in service. Those trains that do carry freight often can’t get to where companies need them to go. Mekky, who needs to move imported grain to and from the firm’s storage facilities in Egypt’s cities, says his firm simply can’t use rail. “The tracks don’t extend from inside the Alexandria Port to where my silos are in Alexandria and Cairo,” he says. Industrial areas and even government facilities were developed as standalone clusters, with little thought given to how goods would reach them. Nor do the government’s proposed new “planned cities” outside the Delta and Nile Valley lie anywhere near the railroad. The system is also drooping under too many layers of inflexible bureaucracy, with government mandates that have little consideration for market realities. ENR, charged with running the railroad, has no real power to address strategic problems. Meanwhile, the transportation ministry owns another seven state-owned companies specializing in railway support services such as maintenance,
cleaning and IT products (reservation systems, e-ticketing, etc.) ENR is required to contract exclusively with these public sector companies, which therefore have little incentive to run efficiently. Egypt’s SEMAF Railway Factory, which manufactures freight- and passenger-train cars, is selling the agency 115 new cars this year to the tune of LE 1 billion. While the ENR is supposed to support itself with train revenues, the government caps the price of train tickets as well as all state-related cargo services. Nor can the agency shut down unprofitable lines like the little-used Safaga-Toshka route. As a result, the national railroad is currently $26 billion in debt, according to Ministry of Transport figures.
“ONE TRAIN CAN CARRY THE SAME SIZE LOAD AS A WHOLE FLEET OF TRUCKS.”
In 2009, the World Bank agreed to loan Egypt $600 million over the next few years to finance its National Railways Restructuring Project. Other funding has flowed in over the last decade from the Arab Fund for Economic and Social Development, Kuwait’s Fund for Economic Development and the African Development Bank, along with the governments of Austria, Italy, France and the United States. The World Bank project, having postponed its original completion date from September 2015 to January 2019, is supposed to outfit key lines with new tracks and signaling systems, among other improvements. However, a status report published by the Bank in September acknowledged delays in implementation and showed little or no improvement in punctuality or safety, while passenger- and freight-train traffic is at all-time low. Some equipment has been replaced in recent years, but in many cases, the spotty nature of the upgrades has rendered them useless. “For example, the latest models of trains will automatically brake if they get too close to the train in front or
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if there’s a problem on the route,” explains Rashad Abdel Latif, who served as a deputy head of the ENR from 2011 to 2013. However, since the track sensors remained outdated, the modern trains didn’t work properly, forcing conductors to switch off the entire system and operate manually. Moreover, railroad operators aren’t properly trained to use new equipment, says Gamal el Seidy, the secretary general of the Rail Workers Union. New drivers are trained by the old ones, who often “can’t cope with newer models bought by ENR,” says Seidy. Mechanics, too, must patchwork together their own solutions to cope with a dearth of spare parts, says Hossam Fouda, a former transport ministry aide who worked in railways. They often had to scavenge parts from old cars and locomotives that were no longer in service in order to fix trains, he says. “Makeshift solutions are a fact of life in these stations.” The government’s most recent plans to overhaul Egypt’s railways are focussed largely on expanding the network and upgrading the trains. Vision 2030 calls for building new dedicated cargo lines between 6 October City and Dekheila Port, south of Alexandria, and connecting industry-heavy Helwan and Ain Sokhna. A new, mixed-use track is to connect Assuit and the manufacturing city of Robiky, east of Cairo. The cost of these expansions is to be offset by the closure of unprofitable routes, though the transportation ministry doesn’t specify which ones. According to Abdel Latif, route closure is a tricky proposition. The ENR has been trying to shut down money-losing routes for years, he says, but some of them serve remote communities that are virtually inaccessible by road. In terms of equipment, the plan entails new emergency braking systems and upgrades for crossings and sensors. For the rolling stock, the proposal wants to import 100 brand new locomotives and refurbish some 400 existing cars and 11 locomotives. Two new state-of-the-art maintenance centers are to be built on the outskirts of Cairo.
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KARIM EL SHAROBY
In Depth
Mahmoud Samy, who was ENR’s chairman from 2005 to 2009, says that the plan’s heavy focus on buying new equipment and expanding routes is unlikely to spur real reform in a railway system whose fundamental set-up doesn’t work. “There are a lot of things that need fixing in the existing network and infrastructure before the government starts with its latest development plan,” he says. For now, it is not clear where the money for these railway improvements will come from. Officials have said they would look to private investors, but this may be a hard sell. “I really don’t see any investor putting money into such a project,” says Abdel Latif Abdel Moneim, a board member of the international transportation and logistics division of the Alexandria Chamber of Commerce. That’s because railroad projects usually require huge upfront costs and take years to yield profits. The last and only time a business got involved in Egypt’s railroad was in 1900, when the privately owned Arab Railway Co. built the line between Luxor and Aswan. But with few passengers and little cargo moving on the route, it lost money, and the firm folded a few years later. Today, many of the world’s railways are at least partly run by the private sector. One hybrid model, widely used in Europe, is for governments to contract
with private companies to manage railroads. In the 19th-century United States, firms built the national train system, which by 1920 had become the dominant means of intercity travel. Railroad ridership slowly declined in the following years, however, and by the mid-20th century, Congress had to step in to save America’s railway network, as one company after another went belly up. The new National Railroad Passenger Corp., better known as AmTrak, was founded in 1971 on a public-private partnership model—a for-profit company that receives public funding. Amtrak has been operating in the red ever since. On the other hand, Japan’s railway, privatized in the late 1980s and run by more than 100 companies, is highly efficient and requires almost no public subsidies. For Egypt, what’s necessary to save the railway isn’t new technology or tracks but a whole new set-up, says Adla Ragab, a logistics and transportation professor at Ain Shams University. “The ENR and the government must find the right model to make a profit for themselves and the private investor while ensuring that train transport remains a public service,” says Ragab. “Otherwise, come 2030, we will end up with same problems we have today.” ■
BUSINESS MONTHLY ARCHIVES
TOURISM
EGYPT LOOKS TO THE PRIVATE SECTOR TO MANAGE THE PAST BY MUSTAFA ZAFAR
E
ven from the Ring Road, the silhouette of the great pyramids of Giza, rising out of the smog and urban detritus of modernday Greater Cairo, is breathtaking. Built more than 4,000 years ago, these mysterious, hulking monuments to the dead are the most universally recognizable symbols of one of the world’s first human civilizations, and they continue to inspire fascination and awe. The pyramids are also Egypt’s most famous tourist attraction. But these days,
visitors to the world’s only remaining ancient wonder have to fight off hordes of desperate hawkers. “Before the revolution, the panorama point used to be so packed with foreign tourists that it would take 10 minutes just finding space for a decent picture,” remembers Mohamed Ashraf, a private tour guide of 20 years, lining up a group of Indian tourists for a photo beside the pyramids while trying to fend off camel-ride sellers hovering nearby. The tourism police look languidly on from a distance, sipping their tea.
In September, officials announced that the government would turn over management of the pyramids to private companies as part of a larger effort to improve and upgrade the site. They added that a LE 5-billion contract to keep the area clean had already been awarded to an unnamed firm, while others would be chosen to handle security and maintenance. The move, which comes at a low point for tourism and the Egyptian economy, is hardly surprising—as the cashstrapped government looks to the free
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In Depth
market to provide the capital to reignite growth in a whole array of sectors, from education to health care to transportation. As it struggles to reinvigorate Egypt’s all-important tourism industry, which has been gutted in the last five years, the government is hiring private companies to handle tasks ranging from improving Egypt’s image abroad to reviewing security procedures at airports. But while many have praised the shift as a long overdue step in the right direction, others have questioned the implications of entrusting a piece of Egypt’s invaluable national heritage to profit-making enterprises. Egypt’s tourism industry, having failed to bounce back after the political turmoil of 2011, is at an all-time low. Recent figures from state-statistics agency CAPMAS show that tourist arrivals dropped by some 51 percent during the first half of 2016 compared to the same period last year. For the first time, Egyptians spent more money traveling abroad during the last fiscal year than foreign tourists spent in Egypt. The economy had become increasingly dependent on tourist dollars in the years leading up to the January 25 revolution, and the demise of the sector has contributed to an array of problems, from the ongoing foreign-currency shortage to unemployment. Many former colleagues of Ashraf’s who could speak English, Italian and Japanese are now driving taxis or working as “partner drivers” for Uber. Many in the tourism industry have lauded the state’s new approach, pointing out that the administration of the great pyramids has gone from bad to worse since 2011 in the hands of low-paid, inefficient public workers. The site was already in need of improvement prior to the revolution, and in the last five years, the pyramids have developed a reputation as an unpleasant place to go. These days, touts with bloodshot eyes have taken to jumping into tourists’ taxis a kilometer out from the plateau. Despite a heavy security presence, the tourism police generally do little to control such harassment. Sami Mahmoud, a former head of the Egyptian Tourism Authority, told
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Al-Monitor in September that officials had been weighing the idea of turning over the pyramids to private-sector management for several years as part of its Pyramids Development Project, a LE 349-million makeover that includes a new parking lot, a visitors’ center with a cinema and electric cars to transport tourists from one spot to another. The plan also calls for moving vendors of souvenirs and building a designated area for horse and camel rides. Ashraf Mohi, director-general of the Giza Plateau, told reporters that the site would be outfitted with a state-of-the-art security system with closed-circuit television cameras. The exact timeline for all these improvements remains unclear, but officials have stated that private companies will handle at least a portion of the work. The plans are part of a larger strategy of looking to the private sector to help reinvigorate Egypt’s image in the eyes of the world. Last year, the government hired a New York advertising agency, J. Walter Thompson, to spearhead a splashy $68million public relations campaign dubbed This is Egypt. Following the October 2015 crash of a charter plane from Sharm el-Sheikh, which killed 224 mostly Russian tourists, Egypt hired London-based consultancy Control Risks to review security at Egyptian airports. Many in the local tourism industry argue that relying on the private sector is the only hope for updating and improving the country’s facilities for international visitors. There is some historical support for their argument. Cooperation between the public sector and business has long been a cornerstone of Egypt’s success as a tourism destination. As Egypt increasingly opened up to the free market in the 1980s, the government privatized hotels and transportation companies and encouraged the expansion of resort tourism on the Red Sea, selling off kilometers of pristine coastline to developers, who were eager to cash in on Egypt’s mild climate and proximity to Europe. This strategy paid off, with the tourist sector steadily expanding over the next several decades. In 2010, a record 14.7 million people visited
Egypt, the vast majority—about 80 percent—heading to sun and sand destinations. Around the world, tourism draws valuable hard currency and creates relatively high-paying jobs for unskilled workers in developing countries. But, as recent years have demonstrated, tourism is a vulnerable industry. One natural disaster or a week of political turmoil can spur travel warnings from Western governments and cost millions in earnings for local workers. Even regional conflict can take a toll. For example, the first Gulf War in 1990 was disastrous for Egypt’s tourism industry, with hotel occupancy rates dipping significantly and revenues slashed by half.
“WE NEED TO FOCUS LESS ON BUILDING RESORTS AND HOTELS AND MORE ON IMPROVING THE QUALITY OF THE TOURIST EXPERIENCE.” Egypt had hoped that the return of relative stability in 2014 would bring back foreign holidaymakers, but a steady drumbeat of negative press—including the Russian plane crash and the Army’s accidental killing of a group of Mexican tourists—hasn’t helped. But scary headlines may not be the only factor keeping Egypt’s tourism industry down. Amr Badr, the managing director of luxury travel agency Abercrombie & Kent, says that local tourism operators need to keep up with the times. “We need to focus less on building resorts and hotels and more on improving the quality of the tourist experience,” says Badr, whose office walls are decorated with framed photos of him shaking hands with visiting celebrities ranging from Bollywood film star Amitabh Bachan to Bill Clinton. Badr explains that luxury travel in the 21st century is about much more than five-star hotels; today’s tourists want a more immersive experience, with a variety of activities that enable them to experience
KARIM EL SHAROBY
In Depth
a bit of local culture. “How can a family get the most out of their experience at the pyramids?” asks Badr. “Will they only buy the tickets to see them and leave, or can we offer a documentary playing on an IMAX screen, provide them with great merchandise?” This is Egypt seeks to tap into “global travel trends that are moving away from polished sterile traveling,” writes Amal El Masri, who heads the Cairo office of J. Walter Thompson, in an email. “Private management of the pyramids is indeed a positive step—it is no secret that we need to improve tourists’ experience at this epic site.” The push toward privatization relating to cultural heritage could also bring Cairo more in line with a larger trend toward integrating commerce in heritage sites. A historic building might contain a farmer’s market, for example. Selima Ikram, head of the Egyptology Department at the American University of Cairo, cites the way the sebils, or ancient fountains, of Istanbul have been converted into shops. At a time when resources are running thin at Egypt’s Ministry of Antiquities, officials are trying to come up with other creative ways to raise revenue—such as renting out heritage sites for private events like weddings. “Before the outbreak of the revolution, the ministry’s
revenues amounted to 100 million pounds a month, whereas now they range between 20 million and 26 million pounds a month, nothing more, while we need about 80 million pounds to pay the salaries of the ministry’s employees and staff,” said antiquities minister Khaled elNani in an August interview with AlMonitor. Ikram adds that offering heritage sites in these ways also contributes to the public appreciation of the country’s history. “Integrating the history of Egypt and antiquities into people’s daily life breathes new life into heritage,” she says. “It makes people feel more connected to and aware of Egypt’s past.” Security has been a big problem at Egypt’s heritage sites, particularly since 2011, as the looting of priceless ancient artifacts has become commonplace. In the wake of urban sprawl, as modern settlements have encroached on ancient sites, conflicts have also increasingly taken place between preservation and the needs of locals. Some argue that private companies are better equipped than the government to keep Egypt’s monuments safe, but others argue that simply handing the task over to deeper-pocketed guardians won’t solve the problem until locals are encouraged to have a sense of communal ownership of such sites. “How do you patrol a place like
Saqqara?” asks Ikram, referring to the ancient necropolis that is the oldest known stone building complex in history. “A villager digs a hole for treasure because he is poor, his children are hungry, and they can’t get work. What are you going to do when prices are rising?” “Unless there is a development plan,” agrees preservationist Monica Hanna, an associate professor of archaeology and cultural heritage and founding dean at the Arab Academy for Science, Technology and Maritime Transport, “no privatization will even make a dent in the problem.” Hanna stresses that aggressive vendors will not stop harassing tourists simply because security is beefed up at the pyramids. Rather, greater awareness and job opportunities are needed. “The decisions to manage and secure the place has to come from the community vis-à-vis the local authorities.” She suggests that tours of the Giza pyramids should incorporate the adjacent village of Nazlet el-Samman and its culture, which could also provide the locals with additional economic opportunities. Hanna isn’t opposed to privatization per se, but she believes economic development—not just economic activity—should be a factor in the running of heritage sites. ■
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Going up The 2016 U.S. Business Mission to Egypt
Over the last year, Egypt has seen a worsening foreign currency shortage add to its economic challenges. But while the country is hardly a risk-free destination for investors, U.S. companies and international financing institutions still see it as full of untapped business potential.
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“The private sector is confident in Egypt’s prospects,” Ambassador David Thorne, senior advisor to the U.S. secretary of state, told officials and members of Egypt’s business community last month. He was speaking on day one of a three-day mission to Egypt by an U.S. business delegation held at the Nile Ritz-Carlton and the Four Seasons Cairo at Nile Plaza. Comprising 130 representatives from more than 55 U.S. firms, the delegation was one of the biggest in recent years. “It’s a testament to the deep interest and confidence that American companies have in the possibilities of today’s Egypt,” said Thorne. The visit, which took place Oct. 23-26, was organized by AmCham Egypt in cooperation with the U.S. Chamber of Commerce (represented by Senior Advisor to the President and CEO Greg Lebedev and Khush Choksy, senior vice president for Middle East Affairs), the U.S.-Egypt Business Council (represented by Chairman John Christmann of Apache Corp.) and the Egypt-U.S. Business Council (represented by Chairman Omar Mohanna). The U.S. mission’s welcoming reception featured U.S. Ambassador Stephen Beecroft, who emphasized the importance of Egypt as a cornerstone to the stability of the entire middle east; historically being the center of culture and innovation and spearheading regional peace efforts. In addition, Ambassador Beecroft shed light on the opportunities that lie ahead once Egypt moves forward with its necessary reform measures that are set to unlock its potential. The dinner reception was hosted by White and Case LLP, a leading international law firm based in the United
States, on the occasion of the launch of their first office in Egypt. Executives met with President Abdel Fattah el-Sisi and Cabinet members during the visit. Six government ministers spoke during the mission events, including the ministers of finance, investment, trade and industry, international cooperation, petroleum and health. The electricity ministry was represented by Sabah Mashaly, first undersecretary. Also in attendance was the chairman of the Suez Canal Economic Zone, Ahmed Darwish. All the officials outlined their strategies to support Egypt’s economic recovery. Representatives of the European Bank for Reconstruction and Development, the International Finance Corp. and the U.S. Trade and Development Agency highlighted how both Egyptian and U.S. businesses can secure international funding for local projects, addressing a critical question amid the dollar shortage. During his speech, Thorne stressed that Egypt is the thirdlargest market in the region for American goods. The United States also continues to be a leading source of foreign direct investment, he said. “We are here to work together to build prosperity for Egypt and our companies,” he said. Among the companies interested in the Egyptian market were Archer Daniels Midland, Cimbria, Black & Veatch, Celgene and Cerner. Thorne called the nation’s biggest economic problems “all too familiar,” a result of declining tourism revenue, lower global oil prices (which have shrunk Suez Canal traffic) and the low “viability” of the Egyptian pound.
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On the other hand, the state department representative praised Egypt’s leaders for pushing through difficult reforms like the recently passed value-added tax, subsidy cuts and moves to streamline bureaucracy. “We applaud the steps the government has taken,” he said. He acknowledged that some of these changes will hurt at first. “But these steps will be necessary to unlock Egypt’s potential and foster increased prosperity for all.” He said that a proposed $12-billion loan from the International Monetary Fund will help ensure that there is an adequate social safety net to help the poor in the wake of economic austerity measures. Meanwhile, the United States stands ready to assist Egypt in implementing the program, said Thorne: “From Washington, we are working with our G7 partners to ensure that the IMF program is fully funded.”
REFORM SCHOOL New taxes and subsidy reductions are expected to further push up inflation, which reached a seven-year high of more than 15 percent in August. Years of inefficient policies like energy subsidies “led us to the problems and issues we have today,” said finance minister Amr el Garhy. In order to recover, a lot depends on the government’s Vision 2030 plan, which was approved by President Abdel Fattah el-Sisi in February. “This plan is the cornerstone of what we are trying to achieve,” said Tarek Kabil, the minister of trade and industry, adding that it “calls for Egypt to be one of the top 30 economies worldwide.” But unlike the country’s pre-revolution growth, which relied on prosperity to “trickle down”
Ambassador David Thorne, senior advisor to the U.S. secretary of state
H.E. Amr El Garhy, minister of finance; Omar Mohanna, Egypt-U.S. Business Council chairman and Suez Cement chairman; H.E. Tarek Kabil,minister of trade and industry; H.E. Sahar Nasr, minister of international cooperation; Anis A. Aclimandos, president of AmCham Egypt and Transcentury Associates; H.E. Dalia Khorshid, minister of investment
H.E. Tarek El Molla, minister of petroleum & metallurgical wealth; Sabah Mashaly, ministry of electricity first undersecretary; Ayman Khattab , General Electric International Operation president and CEO, Northeast Africa
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U.S. business mission press conference
R. Stephen Beecroft, U.S. Ambassador to Egypt
Amr El Garhy, minister of finance
Omar Mohanna, Egypt-U.S. Business Council chairman; H.E. Tarek Kabil, minister of trade and industry; Sahar Nasr, minister of international cooperation
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Ahmed Darwish, Suez Canal Economic Zone chairman
John Christmann, chairman of Apache Corp. and the U.S.-Egypt Business Council
Khaled Abu Bakr, TAQA Arabia executive chairman and Tarek El Molla, minister of petroleum & metallurgical wealth
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from the wealthy to the masses, the current cabinet is pushing a strong social agenda in tandem with economic growth, stressed the ministers. “Economic reforms alone without being packaged with social-development programs will not work… it has to be inclusive,” said Minister of International Cooperation Sahar Nasr. In order to build a big enough safety net, social spending increased to LE 135 billion in fiscal 2015/16 from LE 35 billion in fiscal 2009/10. Meanwhile, subsidies are to become more targeted. “The current subsidy policy is definitely the wrong one,” said Garhy. Replacing blanket subsidies with cash payments for the needy, which have been effective in other countries, is being overseen by the Ministry of Social Solidarity. Officials hope these kinds of reforms will help finalize $12-billion in IMF funding over the next three years. “The IMF is not asking anything new from us,” said Garhy, pointing out that the state began reducing energy subsidies right after Sisi took office in 2016. Other changes, such as replacing Egypt’s sales tax with a VAT, meanwhile, were only recently put in place after years of postponements. Garhy anticipates that revenue from the VAT should equal 1 percent of GDP by the end of 2017. In the coming five years, tax revenue should top 16 to 17 percent of GDP, up from the current total of 12.65 percent. Bringing back foreign investors that fled following the turmoil of 2011 has been Egypt’s holy grail ever since. Investment minister Dalia Khorshid cited the Supreme Council for Investment headed by the president, saying, “This clearly shows that investments are a top priority.” She acknowledged that one of investors’ big concerns is how disputes are resolved here, with land disagreements accounting for some 60 percent of investor complaints. In second place, with 25 percent of disputes, are licensing and regulatory compliance issues. Khorshid noted that the ministry has resolved 387 such conflicts in the first half of this year, while new legislation to make Egypt more investor friendly is in the works, along with a new bankruptcy law. To promote industrial investments, Kabil sees national megaprojects as vital, since they create investment opportunities through new infrastructure, housing, logistics and manufacturing in new locations. Meanwhile, proposed new legislation should reduce the average waiting time for industrial licenses to 30 days, down from the current 632, according to the World Bank’s most recent “Doing Business” report. “We can’t live with that if we want to grow our industry,” says Kabil. The new system should also allow companies to operate while they are still waiting for approval. “This is a breakthrough,” said Kabil. “It will help a lot with the inclusion of the informal sector into the formal economy.” Moreover, a single within the trade ministry will be responsible for doling out industrial plots. There are also plans to form the country’s first dedicated food safety agency, which should give a big boost to the food industry, said Kabil. The ministry is taking the cluster approach, he explained, which aims to concentrate related industries and services in the same place for their mutual benefit. The first cluster will center around the manufacture of leather in Robiky, outside Cairo. The ministry is also working on a furniture cluster in Damietta and a chemicals
Steve Lutes – U.S. Egypt Business Council executive director, H.E. Ahmed Rady – minister of Health; Samir Khalil - PhRMA executive director for Middle East and Africa
and petrochemicals cluster in Alexandria. “Our three-year plan is to have 22 clusters,” said Kabil. By 2020, he wants industry to contribute 21 percent of Egypt’s GDP, up from the 17.7 percent currently, and grow at an annual rate of 8 percent. Egypt is also working on ways to get its many informal small businesses—around 90 percent of SMEs—to go legit. To that end, the government is now allowing firms made up of just one person to register as businesses. Kabil said the ministry is also in the process of setting up an agency that caters specifically to the needs of SMEs, offering training and hiring services as well as help with tasks like conducting feasibility studies and obtaining funding. Shrinking Egypt’s trade deficit is also vital. To accomplish this, said Kabil, a brand new law that regulates imports and does away with a previous requirement that foreign importers use a local middleman is now before parliament. In order to boost exports, Egypt has, for example, established a logistics center in Kenya with a direct shipping line linking the two Eastern African nations. Another such facility is in the pipeline for West Africa. Meanwhile, last year’s tighter import regulations and bigger export subsidies resulted in total imports dropping by $7 billion, while exports were up $1 billion in September over the previous year. “Exports are expected to increase at a faster pace going forward as industry ramps up production and find suitable replacements for imports,” said Kabil. Meanwhile, minister of health, Ahmed Rady highlighted the efforts in trying to solve persistent problems of the private sector, such as the shortage of foreign currency, which has particularly plagued the pharmaceutical industry. “It is important for us to have stability in the supply of this critical sector,” said Rady.
Greg Lebedev, senior advisor to the president and CEO, U.S. Chamber of Commerce
Khush Choksy, U.S. Chamber senior vice president for Middle East and Turkey affairs
FEEL THE POWER More sustainable energy use is also key to bringing back Egypt’s economy, said Minister of Petroleum and Mineral Resources Tarek el-Molla. This goal will require “strict” governance of natural resources and further reforms to energy subsidies, among other things. “Reforms in the past three years have had a positive impact,” said Molla. Meanwhile, oil and gas investments are rising, led by last year’s enormous Zohr natural-gas find and the signing of 70 agreements worth $15 billion to dig 300 natural gas and oil wells in the coming year. “It’s a testament to Egypt’s potential in this sector despite retracting global investments,” said the minister.
Steve Lutes, U.S.-Egypt Business Council executive director
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Hugh Verrier, White & Case chairman
Meanwhile, electricity generation will be restructured to better take into account environmental considerations and consumption trends, said Sabah Mashaly, the electricity ministry’s first undersecretary. “Our strategy is being impacted by global changes. This requires a massive policy change,” says Mashaly, who said that Egypt’s electricity consumption is currently growing at a faster rate than either the population or the economy. “This means that careless and luxury consumption is increasing. The rise in demand is not because of economic or population growth,” she said. “Reducing subsidies is the only solution.” To help increase the nation’s power supply, the ministry is serious about involving the private sector in helping generate green energy, said Mashaly. The introduction for the first time this year of a feed-in tariff—which guarantees that private producers can sell renewables to the government at a fixed rate—opens such a door. “Our long-term plan is for clean energy to supply 62 percent of Egypt’s electricity by 2035,” she said, an ambitious goal given that around 90 percent of the country’s electricity is generated by fossil fuels. Electricity subsidies are supposed to be completely phased out by 2019. “Our aim is to move from a regulated to a deregulated electricity market” that nonetheless still caters for the poor, she said.
VITAL ARTERY
Guests at a U.S. Business Mission to Egypt luncheon
Formed last year, the Suez Canal Economic Zone is a completely autonomous and independent investment district governed by its own laws. While the zone is part of the Egyptian state, “We are not government,” said Darwish, who heads up the zone. The 461 square-kilometer area is divided into four major zones. The biggest two are “integrated zones,” said Darwish, each with its own port, logistics facilities and housing, in addition to factories. Meanwhile, the southern part of the zone is being developed for heavy industries such as petrochemicals and oil refineries. At the northern border, two developers are laying the infrastructure for a pair of 6-million-square-meter plots. “We build the main roads and deliver the infrastructure to the borders of these plots. The private developers are responsible for taking this infrastructure inside their plots,” he said.
Robert S. Beecroft, U.S. Ambassador to Egypt; Tarek El Molla, minister of petroleum & mineral resources; Anis A. Aclimandos, AmCham Egypt president; Hugh Verrier, White & Case chairman; Omar Mohanna, Egypt-U.S. Business Council chairman
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The second zone is that of East Port Said. Here, “we are more cautious when talking to private investors, because the infrastructure is still incomplete,” he said. Some 5,000 meters of port terminals are also being built to complement the existing 2,000-meter terminal in East Port Said operated by A.P. Moller on behalf of The Maersk Group. Third, there is Kantara, near the Nile Delta. “We are looking for a developer to build a 200-acre SME zone,” said Darwish. “The rest of the zone will be for agri-business and housing.” The fourth and final zone is that of West Port Said Port, and along with all six ports under SCZone control. “The Arish port is especially important because the area is surrounded by cement firms that need a bigger port,” said Darwish.
MONEY TALKS Financing amid Egypt’s current foreign currency shortage is a special challenge. According to Minister of International Cooperation Sahar Nasr, more than $15 billion in loan and grant agreements have been pledged since September 2015, with $5.3 billion of that amount received to date. To further encourage private investors, the ministry is conducting private-sector surveys with the IFC, The World Bank and the EBRD. The ministry also plans to poll the public and the informal sectors to identify local challenges and investment opportunities. Since 2012, the EBRD has invested €1.9 billion across 40 projects in Egypt. According to Hildegard Gacek, the Bank’s managing director for the southern and eastern Mediterranean, 2016 would see a total of €780 million in investments, mirroring the level of 2015. SME financing is important for the EBRD, said Gacek, but due to regulatory issues, local banks must act as middlemen in the process. Almost 24 percent of the EBRD’s local portfolio is in banks, followed by energy (22 percent) and transport (8 percent). Municipal infrastructure is also an important part of the Bank’s work. “Right now, our overarching theme is transition to green economy across all sectors,” she said.
Anis A. Aclimandos, AmCham Egypt president; Dalia Khorshid, minister of investment
Members of the audience
Finance panel with representatives from the U.S. Trade and Development Agency, Carbon Holdings, White & Case, the International Finance Corp. and the European Bank for Reconstruction and Development
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The private sector can also seek funding from the IFC. “We can only finance companies that are at least 50-percent owned by the private sector or managed and controlled by them, such oil and gas investments,” said Nada Shousha, the IFC’s Egypt country manager. The World Bank arm provides loans, equity stakes and trade financing, to name a few options. It also offers advisory services to build access to capital and improve on the overall investment climate. Meanwhile, the IFC Asset Management Co., a subsidiary, manages IFC and third-party equity funds. As of June, the IFC had funded a total $1.5 billion in Egyptian investments since the beginning of 2011. Going forward, Shousha said the agency plans to focus its funding on public-private partnership projects. Other priorities are financial infrastructure development, education and skills development and policy advocacy. Finally, the U.S. Trade and Development Agency aims to hook up American companies with businesses in emerging economies. Its main areas of focus are transportation, energy and telecommunications as well as the infrastructure to support these sectors. The agency organizes events like the 2012 Egypt Forward Conference and promotes projects that assist with feasibilities studies and other efforts to help local firms meet the standards of U.S. investors’ standards. Typical funding levels are between $400,000 and $700,000 per project, and efforts are assessed based on whether “the project is a local priority or not,” said Carl Kress, the USTDA regional director for East Asia, the Middle East, North Africa, Europe and the Eurasia region. “Also, the project owner must have some idea from where financing will likely come for us to correctly gear the assistance program.” The buzzword at the event among all the Egyptian officials was “sustainability”: Everyone agrees that economic growth will have to benefit all classes society’s factions, even as it takes reform measures that may be painful in the short term. “This time around, we are all seeing huge challenges, but they are all short-term challenges,” said Garhy, the finance minister. In the meantime, Egypt is counting on its 90-million plus strong population to continue buying things, even in the wake of rising prices. Garhy said: “Once we address all these issues, people will see a completely different story from Egypt.” A closing dinner on the event’s final day was hosted by Marriott International. ■
Private sector roundtable on agriculture
Omar Mohanna, Egypt-U.S. Business Council chairman and Tarek Kabil, minister of trade and industry
Robert S. Beecroft, U.S. ambassador to Egypt; Ambassador David Welch Bechtel, president of international & government affairs; Amre Moussa, former minister of foreign affairs and former secretary general of the Arab League
M. Gamal Moharam, former AmCham Egypt president and MGM Financial & Banking Consultants chairman; Khaled Abu Bakr, TAQA Arabia executive chairman; Tarek Elrefai, Barclays Egypt general manager
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MESSAGE FROM THE U.S. CHAMBER OF COMMERCE
Building on the Momentum By Steve Lutes,
executive director, U.S.- Egypt Business Council
American businesses have for decades valued Egypt’s market and have a long history of making positive contributions to the country’s economy. The theme of the recent business mission organized by the U.S. Chamber of Commerce’s U.S.-Egypt Business Council, “Partnering for Egypt’s Future,” was forward-looking. The U.S. Chamber, working in close cooperation with AmCham Egypt and the Egypt-U.S. Business Council, sought to underscore the importance of a collaborative approach between the business communities and governments in both nations, with the shared goal being able to strengthen the relationship as we move forward together. The timing of our business mission was significant and intentional, as weighty developments are unfolding in both countries. On one hand, we wanted to make clear to our friends in Egypt, both in government and in business, that regardless of the outcome of the upcoming presidential elections in the United States, the American business community remains committed to having a robust economic relationship with Egypt. On the other hand, we wanted to demonstrate our support to the Egyptian government for the vital reforms it is pursuing in order to attract investment, bring about greater fiscal stability and enhance the economy’s competitiveness. At the U.S. Chamber, we steadfastly believe that it is in our mutual best interests to deepen and expand commercial ties between the United States and Egypt. We will continue to constructively engage both governments to remove barriers to trade and investment while striving to improve the business environment through regulatory and policy reforms. During the business mission, we discussed a number of important issues with key Egyptian officials and learned about opportunities across an array of sectors. Our time in Cairo was also devoted to celebrating this critically important bilateral relationship. We now have to build on this momentum and work to grow and strengthen the U.S.- Egypt economic relationship.
Good will hunting • U.S. companies in Egypt have always had a strong CSR presence. The Apache Corp., the biggest American investor in Egypt, is cooperating with Springboard Educating the Future to support education in Egypt, benefiting around 7,000 students a year. In 2015, Apache employees raised LE 380,000 to help some 60 aid groups and orphanages across Egypt. • Working with UN agencies, NGOs and the government, The Coca-Cola Co. is working to develop 100 Egyptian villages by 2020. So far, 40 of these municipalities have been outfitted with basic infrastructure such as that providing access to fresh water, while 46 schools and 32 medical centers were refurbished, benefitting some 56,000 people. • PepsiCo’s initiatives include the Tommoh Food for Education initiative, the Grassroots Football League and Litter for Light. The firm has also assisted some 10,000 farmers boost their incomes by offering them ways to improve their skills. • Pfizer contributed to the International Trachoma Initiative, the Emergency Hospital of Suez Canal University in Ismailia and Together Against Cancer, among others. • In 2016, Marriott International donated $18,000 to the Children Cancer Hospital 57357; $28,000 to Ahl Masr Hospital, a specialized burn care center; and the Breast Cancer Foundation. Donations to orphans totalled around $12,000 in 2016. • General Electric has focused on empowering and educating Egypt’s youth, serving 1,000 young people and partnering with INJAZ Innovation Camp at Al Azhar University, which offers assistance to around 100 female students in starting their own businesses. GE also works with the group Gannat El Koloud to support residents of El Doweika, donating LE 10,000 to buy basic foods for 140 families. The company also spearheads several fundraising initiatives in Upper Egypt to provide poor residents with housing, food and clothes for the winter.
Mission Sponsors: Apache - PepsiCo - Pfizer - The Coca-Cola Company - White & Case LLP
Mission Events Sponsors: E-finance - Ernst & Young – Egypt - Dana Gas Egypt - General Electric International Operation Microsoft A special thank you to Uber, which sponsored 2,000 rides to our mission events, and Marriott International for sponsoring the mission’s closing reception.
Business Monthly – November 2016 I
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Stock Analysis
The F word
A
fter weeks of vain predictions and broken promises, investors had just about given up hope of the Central Bank ever floating the pound. Then finally, on Nov. 3, officials announced that Egypt was taking the long-awaited step of allowing its currency to trade freely. The benchmark EGX 30 soared to its highest level in six months on the news, climbing 8.2 percent before leveling off to close up 3.35 percent at 8,810. Prior to the devaluation, the period from Sept. 15 to Oct. 15 saw a mixed performance. On one hand, the benchmark EGX 30 reversed its negative trend in the previous period to register a 6.6 percent gain, closing at 8,505.1. On the other, the EGX 70 slid 3 percent to 345.9, further widening its year-to-date losses to -8.7 percent. Unsurprisingly, declines beat advances by a ratio of 2to-1 as most of the gains came from large caps. And needless to say, the EGX 30’s gains are thanks to its large cap constituents. For instance, CIB stock—which advanced 10.7 percent to LE 53.28—is poised to benefit from pentup demand for credit, following the floatation of the pound. Meanwhile, stocks pinned to the dollar benefited. Global Telecom Holding (GTHE), whose revenue comes from mobile operations outside the country, saw its shares
climb 28 percent to LE 5.16. Still, the rumor resurfaces from time to time that GTHE’s parent company, VimpelCom, might make an offer any moment to take the telecom private. Oriental Weavers Carpet (ORWE) stock advanced 18 percent to LE 9.27. Another play on the dollar’s strength is EFG Hermes (HRHO), which has a large surplus of greenbacks on its balance sheet following the divestiture of its Lebanon subsidiary, Credit Libanais bank. The stock gained 16.8 percent to LE 14.23. Also, Elsewedy Electric (SWDY) and Orascom Construction (OCI) have been seeing new contracts priced in dollars. The former’s shares advanced 14.9 percent to LE 60.17, supported in part by Elsewedy’s share buyback plan of 2.2 percent, or 5 million issued shares. Meanwhile, the latter saw its stock advance by 8.2 percent to LE 76.41. However, OC’s dually-listed dollar-priced stock trading on the Dubai Nasdaq Dubai inched up by only 1.1 percent, reflecting the then parallel exchange rate of just above LE 14 to the dollar, which was evident in both pound-(LE 76.41) and dollardenominated stocks ($5.41). A lot is at stake now that the CBE has finally floated the pound, and officials and investors alike will have to be prepared.
IN THE SPOTLIGHT
Global Telecom Holding Global Telecom Holding (GTHE) stock has jumped 148 percent so far in 2016, having risen 28 percent from LE 4.03 to LE 5.16 in the most recent period. The stock ended in the black in 11 out of 18 trading sessions, with some 195 million shares worth LE 884 million changing hands. In light of the weak Egyptian pound, investors consider stocks like GT—whose operations are all outside the country—a good bet to hedge against devaluation. Still, investors see GTH as a potential acquisition target by its parent, VimpelCom. More recently, Global Telecom said its Algerian subsidiary Djezzy had launched 4G/LTE services in the North African country.
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Market Watch
Capital Markets Egyptian price indices - EGX 30
8505
EGX 30
Egyptian price indices - EGX 70
346
EGX 70
Selected sector performance
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Market Watch
Capital Markets Corporate News Orascom adds more than half a billion to backlog Orascom Construction (OCI) said its U.S. subsidiaries Contrack Watts and Weitz had added around $575 million to its backlog in the third quarter. This was due to a combination of new infrastructure work, mainly in the Pacific Rim, and commercial business in Weitz’s core markets in the United States.
Elsewedy buys back shares Elsewedy Electric (SWDY) announced a LE 312.5-million share buyback program (or 5 million shares at LE 62.5 a share in two tranches) set to take place in late October. The share buyback program was financed via the company's own reserves. Elsewedy has set the fair value of its stock at LE 73.8 a share per an independent financial advisor.
Heliopolis H&D splits stock Heliopolis Housing & Development (HELI) said its board of directors approved a 2-for-1 stock split. Accordingly, HELI’s par value will be halved from LE 1 per share to 50 piastres. Following the stock split, the number of issued shares will double to 222.5 million for an issued capital of LE 111.25 million.
Oriental Weavers monopoly charges dismissed, TMG files suit According to an announcement by the company, Oriental Weavers Carpet (ORWE) has been acquitted of antitrust charges. The Consumer Protection Agency referred Oriental Weavers to prosecutors in August 2015 on charges of engaging in monopolistic practices. On a separate note, Talaat Moustafa Group Holding (TMGH) filed a lawsuit against the New Urban Communities Authority to reduce the interest on settlement payments of LE 1.1
billion as a result of rezoning the land for commercial rather than residential use.
Attaijariwafa Bank acquires Barclays Egypt operations Morocco’s Attaijariwafa Bank (ATW) has reportedly acquired Barclays Bank’s retail and corporate banking operations in Egypt for $500 million. The deal is part of the British bank’s recent strategy of getting rid of non-core business. Barclays Egypt has some 1,500 employees and 56 branches. Completion of the sale, which is pending regulatory approval, is expected by the end of the year.
Sidi Kreir’s ETHYDCO starts commercial operations The chairman of the Egyptian Petrochemicals Holding Company (ECHEM) revealed that the Ethelyne & Derivatives Co. (ETHYDCO) commenced operations on its butadine plant, producing 20,000 tons of the chemical annually. The firm plans to export its butadine, which is used in a number of industrial applications.
Madinet Nasr registers strong pre-sales Madinet Nasr Housing & Development (MNHD) recorded its highest pre-sales in a quarter, registering an eight-fold increase year-over-year to LE 1.3 billion in the third quarter of 2016. Moreover, the firm recorded a 787 percent growth in contracted sales of LE 372 million in September. Madinet Nasr added that it has more than 7,980 units under development at five key projects in the Greater Cairo area.
Raya Holding to venture into food sector The board of Raya Holding (RAYA) voted in principle to start negotiations to acquire a food manufacturing project. The firm said the acquisition is subject to completion of the due diligence process and agreement on the terms of the deal.
International stock price indices Oct.15
Sept.15
July 15
May 15
value
% change
value
% change
value
% change
DOW
18,138.00
18,212.48
-0.41%
18,516.55
-2.04%
17,251.53
5.14%
NASDAQ
5,214.16
5,249.69
-0.68%
5,026.59
3.73%
4,717.68
10.52%
S&P 500
2,132.98
2,147.26
-0.67%
2,161.74
-1.33%
2,046.61
4.22%
FTSE 100
7,013.00
6,730.30
4.20%
6,669.24
5.15%
6,138.50
14.25%
NIKKEI 225
16,856.00
16,405.01
2.75%
16,405.00
2.75%
16,412.00
2.71%
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Business Monthly – November 2016
Market Watch
Money & Banking INTEREST RATES
BANKING & RESERVES (in millions of LE) 2015
2016
December
January
February
March
April
May
June
July
Reserve Money
420,638
418,881
410,150
430,378
442,281
464,664
478,082
449,591
Int'l Reserves (net, US$ mln)
16,478
16,534
16,586
17,011
17,521
17,546
15,536
16,564
Domestic Liquidity
1,905,464
1,909,422
1,922,685
1,987,839
2,006,632
2,044,293
2,094,500
2,119,715
Foreign Assets (net)
1,384,872
1,391,490
140,230
1,457,994
1,466,460
1,491,322
1,521,565
1,541,213
Domestic Assets
1,905,464
1,909,506
1,922,685
1,987,839
2,006,632
2,044,293
2,094,500
2,119,715
17.28
17.29
17.03
18.77
18.83
18.61
18.53
18.52
End of
Dollarization Rate (%) Discounted Bills (except CBE)
4,844
4,602
4,623
4,749
4,660
4,963
5,601
5,425
786,655
793,064
799,755
847,574
860,783
920,697
937,126
938,918
Securities (except CBE)
1,105,680
1,112,928
1,121,730
1,179,715
1,199,345
1,254,065
1,283,616
1,298,739
Currency in Circulation
324,569
326,179
325,132
331,977
342,842
352,896
369,321
376,908
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
Oct.15 6.748 23.377 10.842 6.735 1.319 9.780 0.133 8.530 12.476 29.275 0.579 0.141 2.365 2.874 2.416 8.876
Sept.15, Amount 6.626 23.355 11.701 6.730 1.328 9.957 0.132 8.630 12.463 29.368 0.578 0.136 2.362 2.972 2.413 8.865
2016 change 1.84% 0.09% -7.34% 0.07% -0.67% -1.77% 0.56% -1.16% 0.11% -0.32% 0.17% 3.56% 0.09% -3.31% 0.12% 0.13%
July, 2016 Amount change 6.754 -0.09% 23.3143 0.27% 11.73 -7.57% 6.848 -1.65% 1.325 -0.40% 9.841 -0.61% 0.132 0.42% 8.425 1.25% 12.452 0.19% 29.262 0.04% 0.578 0.17% 0.140 0.37% 2.361 0.16% 3.062 -6.14% 2.411 0.21% 8.857 0.22%
May 16, 2016 Amount change 6.435 4.87% 23.492 -0.49% 12.715 -14.73% 6.845 -1.60% 1.356 -2.68% 10.012 -2.31% 0.132 0.67% 8.149 4.68% 12.467 0.07% 29.369 -0.32% 0.585 -1.03% 0.136 3.75% 2.361 0.15% 2.980 -3.56% 2.412 0.19% 8.858 0.21%
Oct. 15, 2015 Amount change 6.658 1.35% 20.561 13.70% 11.983 -9.52% 6.007 12.11% 1.228 7.43% 8.912 9.74% 0.120 10.77% 6.536 30.51% 10.982 13.60% 25.834 13.32% 0.513 12.87% 0.124 13.57% 2.080 13.66% 2.643 8.73% 2.125 13.69% 7.807 13.69%
Business Monthly – November 2016
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Market Watch
Key Indicators DEMOGRAPHICS 2008
2009
2010
2011
2012
2013
2014
2015
Total Population (millions)
79.1
83.5
84.5
88.0
90.2
92.2
94.7
96.1
Labor Force (millions)
24.7
25.4
26.2
25.8
27.0
27.6
28.4
28.5
Labor Force / Population (%)
32.8
33.1
33.4
33.0
32.7
32.7
31.3
32.2
8.7
9.4
9
12.0
12.7
13.2
13
13
Unemployment Rate (%)
SOURCE:
CENTRAL BANK OF EGYPT
BALANCE OF PAYMENTS (in millions of U.S. $) 2015/16
2014/15 Trade Balance
Q2
Q3
Q4
End of year
Q1
Q2
Q3
Q4
-10,430.3
-9,385.4
-9,227.6
-38,785.4
-9,985.9
-9,561.6
-9,858.5
-8,285.2
Exports
5,769.7
4,617.7
5,201.6
22,058.2
4,646.1
4,399.1
4,275.5
5,298.9
Imports
-16,200.0
-14,003.1
-14,429.2
-60,843.6
-14,632.0
-13,960.7
-14,134.0
-13,584.1
Services (net)
1,775.8
341.6
500.6
4,727.5
1,686.8
543.7
177.9
-346.7
Receipts
6,008.3
4,385.0
5,182.5
22,024.6
5,142.9
4,131.6
3,513.9
3,687.8
Payments
4,232.5
4,043.4
4,682.2
17,297.1
3,456.1
3,587.9
3,336.0
40,434.5
Balance of Goods & Services
-8,654.5
-9,043.8
-8,727.3
-34,057.9
-8,299.1
-9,017.9
9,680.6
-8,361.9
Transfers
5,797.2
4,963.1
4,926.8
21,875.7
4,318.8
3,992.7
4,131.4
4,442.2
Balance of Current Account
-2,857.3
-4,080.7
-3,800.5
-12,182.2
-3,980.0
-5,025.2
-5,549.2
-4,189.7
Capital & Financial Account
72.4
6,067.2
10,682.6
17,633.6
1,500.5
7,816.9
8,224.8
5,944.8
Foreign Direct Investment
960.0
2,947.9
689.9
6,371.0
1,385.5
1,718.5
2,772.9
992.9
-1,427.0
-29.1
4,771.0
3,724.9
3,656.7
-251.6
235.4
-827.5
Overall Balance
SOURCE:
CENTRAL BANK OF EGYPT
NON-PETROLEUM TRADE (in millions of U.S. $) Exports (Q4 2015-16) Total
Imports (Q4 2015-16)
Balance ( Q4 2015-16)
5,298.9
13,584.1
297.8
653.0
-355.2
1,594.5
4,256.1
-2,661.6
Other European countries
503.3
1,135.2
-631.9
Russian Federation & CIS
69.2
732.4
-663.2
1,690.5
2,254.2
-563.7
Asian countries (non Arab)
649.2
2,669.3
-2,020.1
African countries (non Arab)
127.9
215.5
-87.6
6.7
145.3
-138.6
359.8
1,523.1
U.S.A. E.U.
Arab countries
Australia Other countries
-8,285.2
-1,163.3 SOURCE:
INFLATION
The CPI (Consumer Price Index) and PPI (Producer Price Index) are based on the results of surveys of expenditure and consumption and relevant baskets of goods and weights. SOURCE:
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CENTRAL BANK OF EGYPT
Business Monthly – November 2016
GDP GROWTH
Gross Domestic Product (GDP) growth rates are based on 2001-02 prices.
SOURCE:
CENTRAL BANK OF EGYPT
CENTRAL BANK OF EGYPT
TOURISM VISITS
Year 2014-15 2013-14 2012-13 2011-12 2010-11
Tourists 10.24 million 7.97 milion 12.21 millon 10.95 millon 13.7 millon SOURCE:
Change 28.6% -34.7% 9.2% -8.2% -12.9%
CENTRAL BANK OF EGYPT
Market Watch
Egypt-U.S. Trade EGYPTIAN EXPORTS TO THE U.S. (in millions of U.S. $)
EGYPTIAN IMPORTS FROM THE U.S. (in millions of U.S. $)
U.S.-EGYPT TRADE DEFICIT (in millions of U.S. $)
EGYPTIAN EXPORTS TO THE U.S. DURING AUG. 2016
EGYPTIAN IMPORTS FROM THE U.S. DURING AUG. 2016
SOURCE:
US INTERNATIONAL TRADE COMMISSION (USITC)
Business Monthly – November 2016
I
45
The future
ARE WE REALLY HERE? Debating the simulated universe hypothesis By Edmund Bower
L
ast month, amid news of a surreal U.S. presidential election and an international migrant crisis, international publications ranging from Business Insider to the Daily Mail reported that the entire universe may be an illusion. “Bank of America analysts think there’s a 50-percent chance we live in ‘The Matrix,’” read a headline in the Independent. The information was taken from a 41-page September research note by Bank of America Merrill Lynch on the future of the “virtual, augmented and mixed reality” industries, complete with a colorful infographic featuring statistics on everything from the number of people playing Pokemon Go (50 million per month) to the projected size of the global virtual reality market in 2022 ($150 billion). It also trotted out a 21st-century version of an old theory that’s been dug up and dusted off recently—that we’re living in a simulated virtual world—and dared to slap on a range of probability of it being true (20-50 percent.) With the theory gaining currency recently, researchers gathered at New York’s American Museum of Natural History in April to debate the so-called simulation hypothesis, which was posited in a 2003 paper by Oxford University philosopher Nick Bostrom. Questions on the nature of reality go all the way back to Plato’s Republic, but the notion that recent advances in technology have raised questions about our very existence is based on a relatively simple argument: If we can create a virtual reality that’s indistinguishable from the real thing, then chances are, it’s already been done. And if that’s true, why should we assume that our world is the original, rather than merely one of numerous other simulations? “The argument is that we are already approaching photorealistic 3D simulations that millions of people can simultaneously participate in,” explains the BAML report. “It is conceivable
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Business Monthly – November 2106
that with advancements in artificial intelligence, virtual reality, and computing power, members of future civilizations could have decided to run a simulation of their ancestors.” Chances are, as an April piece in Scientific American put it: “They would probably have the ability to run many, many such simulations, to the point where the vast majority of minds would actually be artificial ones.” Therefore, “simple statistics suggest it is much more likely that we are among the simulated minds.” The idea’s proponents include tech billionaires and NASA scientists, among them astrophysicist Neil deGrasse Tyson and Silicon Valley entrepreneur Elon Musk. In a Q&A session at the California Code Conference near Los Angeles this summer, Musk, the founder of SpaceX and Tesla Motors, said that given recent developments in virtual-reality technology, it’s “inevitable” that augmented reality and “base” reality will eventually become indistinguishable. He echoed Bostrum’s argument that it would be fatuous to assume that we’re living in the latter, the odds of which he put at “billions to one.” A recent profile in The New Yorker on computer programmer and venture capitalist Sam Altman described many in Silicon Valley as being “obsessed with the simulation hypothesis, the argument that what we experience as reality is in fact fabricated in a computer; two tech billionaires have gone so far as to secretly engage scientists to work on breaking us out of the simulation.” Wacky as it may sound, the theory is connected to real, breathtaking leaps that have taken place virtual reality in recent years, particularly in computer gaming. The Oculus Rift headset, which submerges users in a simulated 3D world, hit stores earlier this year at $599.99 a pair. With separate screens for each of the eyes, the headset uses a positional tracking system that replicates players’ movements. In 2013, Facebook bought
The Future
Oculus VR for $2 billion, and hardware companies like Sony and HTC have been hot on their heels ever since, releasing competing headsets. Microsoft’s much-hyped virtual-reality console, Project Scorpio, will launch sometime in 2017. Although it’s still early days for virtual reality, more money than ever is being poured into development. In last month’s note, BAML estimates that venture capitalists have sunk a record $2 billion into virtual reality and developing what it describes as “one device to rule them all.” VR (and AR and MR) is “enabling a fourth wave of computing power via a spatial computing revolution that integrates disruptive technologies such as sensors, Big Data, the cloud, AI, and wearables,” write analysts. “It could be the one device to disrupt and rule the world of technology—bridging the digital and physical worlds for the 3.5 billion internet users, 3.6 billion mobile broadband users, and 1.6 billion with TVs globally.” Technology in the digital age is advancing at such a pace that it hardly seems surprising that the unimaginable will soon become real, point out proponents of the of the simulation theory. “Forty years ago, we had Pong—two rectangles and a dot,” said Musk, 48, at the Code Conference. “Now, 40 years later, we have photorealistic, 3D simulations with millions of people playing simultaneously, and it’s getting better every year.” As a rule, computer memory and processing power double every one-anda-half to two years. Great strides are also taking place in artificial intelligence. In 2013, the Robotics Institute at Carnegie Mellon University introduced its Never Ending Image Learning system, or NEIL, a computer designed with common sense and the ability to learn things without being taught. Funded by Google and the United States Department of Defense, NEIL is teaching itself connections between objects; for example, that zebras live in the savannah, and zebras and tigers both have stripes. Twenty years ago, it was big news when IBM’s Deep Blue became the first computer to beat a world champion at chess. This year, an artificial intelligence program developed by Google DeepMind managed to triumph over the reigning world champion in Go, an ancient Chinese war game developed two-and-ahalf millennia ago that has long been considered the Holy Grail for artificial intelligence because it depends on not only math and strategy but abstract thinking. Because Go involves a seemingly endless number of possibilities—the number of legal board positions is larger than the estimated number of atoms in the universe—it’s considered notoriously difficult to teach computers. Basically, “Humans have been honing our collective knowledge of the game for more than 2,500 years—the difference is that AlphaGo can do the same thing much, much faster,” explained a March article in The Atlantic. “The ways in which we might apply these revolutionary advances in machine learning—in machines’ ability to mimic human creativity and intuition—are virtually endless.” The way we interact with machines also continues to evolve— from pointing-and-clicking on computers to touchscreens on
mobile phones, for example. “Artificial reality takes it one step further, removing any tangible interface at all, allowing people to communicate through natural modes of interaction such as gaze, gesture, voice, and eventually context,” write the analysts at Bank of America. In September, Uber, the mobile ride app that’s upended the taxi industry, rolled out a line of driverless taxis in Pittsburgh. The darker implications of artificial intelligence have been considered before. In his 2014 book “Superintelligence: Paths, Dangers, Strategies,” Bostrum, who heads Oxford’s Future of Humanity Institute, reiterates the fear that we will soon be able to build a machine that’s smarter than us, and when we do, we run the risk of being ruled by our own supercomputers. Researchers say we are almost sure to develop human-level machine intelligence by sometime between 2075 and 2090. Unfortunately, the advent of this superintelligence is probably going to take over the world, writes Bostrum, and destroy all human life and values. This sci-fi dystopian vision of the future—which has been a trope of fiction and Hollywood for decades—is now imminent, he writes, with our deepening dependence on technology manifesting itself in new ways. Altman, the tech entrepreneur, believes that the human race’s only hope is to “merge” with our machines. “These phones already control us,” he tells The New Yorker. For his part, Bostrum is convinced that artificial intelligence is “the most important and most daunting challenge humanity has ever faced.” Not everyone is convinced that we are all mere files on some higher species’ hard drive, however. Lisa Randall, a theoretical physicist at Harvard University, questions why a superintelligent species of the future would actually be interested in simulating us. After all, she points out: “We mostly are interested in ourselves.” During last spring’s discussion on the topic at the Museum of Natural History, Randall said: “I actually am very interested in why so many people think it’s an interesting question.” In a June article for Vice Motherboard, psychology professor Riccardo Manzotti and Andrew Smart, an author and cognitive scientist, likewise dismissed the simulated universe hypothesis, which they called nothing more than “a technologically updated version of one of the oldest philosophical puzzles—namely, is the world we live in nothing but a dream?” Moreover, just because computers are sure to get exponentially faster doesn’t necessarily mean they’re going to start producing fake versions of reality. “Making bigger bows and stronger arrows will never lead to an H-Bomb,” write Manzotti and Smart. “It’s a belief that we have no reason to take seriously”. That’s because virtual reality, however lifelike, is still merely a copy of the real thing. In 2012, David Tong, a professor of Theoretical Physics at the University of Cambridge concluded that particle physics may have certain aspects that simply cannot be simulated by a computer. As Manzotti and Smart put it: “A simulated apple cannot feed anybody. No matter how many pixels.” ■
Business Monthly – November 2106 I
47
COURTESY OF YANA
Dining Out
GOING EAST BY KATE DURHAM
F
rom the outside, the Royal Maxim Palace Kempinski Cairo reminds me of the royal chateaus I once toured in Germany— smaller than Versailles or Buckingham Palace, and with a touch of signature Parisian Haussmann architecture in the curved blue roof and neoclassical domes that make the hotel look like a mirage rising above the dingy Ring Road. Inside, however, instead of gilded, lion-foot furniture, the lobby has marble Greek columns arranged around a strikingly modern chandelier of bubble-like
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glass globes hanging like grapes from the ceiling. There are further visual shifts as you make your way to Yana, the hotel’s new pan-Asian restaurant on the first floor, where a life-size golden Buddha greets you at the door. Once you step inside, though, the ambiance is intimate. The dining room is a study in gold and ebony, with almost black wood framing wall-length basreliefs of the face of a young Buddha, the sort that hang in Thai and Indonesian temples. Wide pillars help lend an air of privacy in this cozy, softly lit space— which is so softly lit, in fact, that the
Business Monthly – November 2016
menus come with individual clip-on reading lights to illuminate the pages. I don’t normally find myself moved by table settings, but Yana’s ebony chopsticks inlaid with brass were a very elegant touch. The impeccably arranged live orchids in bamboo holders were the coup de grace. If you’re looking for a romantic evening, this is the place for you. Yana bills itself as pan-Asian, and indeed, in addition to the Chinese stir-fry and Japanese sushi options, its menu offers Thai, Indonesian and Malaysian dishes. The latter particularly intrigued us:
Between my companion and me, we’d explored Thailand and Indonesia (and it goes without saying that we were well familiar with stir-fry and sashimi) but Malaysian cuisine remained a mystery. Unsurprisingly, however, it turns out that there is a lot of crossover among the kitchens of these three south Asian countries, all neighbors along kilometers of tropical ocean coastline, and Yana’s menu features seafood in many of its courses. Chef Prapai Pattamang is a native of Thailand, a country known worldwide for its delicious cuisine, and I was hoping our server could recommend some house specialties. Alas, she just recapped the menu, which is not a great sign in a five-star establishment, where waiters are supposed to be able to demonstrate that they know the menu and have sampled the food. Absent any expert guidance, we adopted a strategy of eating our way across Southeast Asia. Representing Japan, the Crispy Vegetable Tempura (LE 58) starter featured fried bell peppers, zucchini and yams, all served with plum sauce. The tempura itself was a bit heavy on the batter for my taste, and I would have liked more variety in the vegetables. A better choice was the Malaysian Chicken Satay (LE 105), which came with peanut sauce and pickled cucumbers. While I didn’t notice anything distinctly Malaysian about the satay, which is also familiar staple of Thai menus, it was by far the most tender, juiciest satay I’d ever tried. As an added bonus, the peanut sauce had just a hint of chili to give it a little kick. Our main dish was the Grilled Lobster, Tiger Prawns, Squid and Salmon (LE 565), a mixed seafood platter for two. Sadly, the salmon I’d been looking forward to had been replaced with a soft, flaky white fish of some kind, but the tiger prawns were indeed large and the squid was prepared in toast-sized cuts that were chewy but not rubbery. The seafood rested on a bed of wok-fried vegetables dressed lightly in a creamy bisque. The star of the show was the lobster tail, which was more delicate in texture than the prawns and squid but not as soft as the fish. The lobster’s subtle, slightly rich flavor needed no assistance from the triad of house
COURTESY OF OAK YANA
Dining Out
sauces, which included XO, sweet-andsour and sweet chili. Our server also brought over a larger side of chili-lemon sauce, apologetically explaining that the chef meant to include it instead of the sweet chili. I’m glad she did, as the chili lemon was the best accent of the lot. It was the only one with any real kick to it, while its lemon base allowed the flavor of the seafood to shine through. My companion, an aficionado of Thai cuisine, also opted to try the Roasted Duck Red Curry (LE 195), which had relatively thick slices of duck along with chunks of pineapple and grapes in a coconut milk broth. I suspect that smaller cuts would have served the dish better, as we found the duck slightly tough and dry. For my part, I had to try the Nasi Goreng (LE 120), Indonesia’s version of fried rice and its national dish. The ingredient that sets Nasi Goreng apart from plain old fried rice is the kecap manis, a sweet soy sauce of a molasses-like consistency. The Royal Maxim’s interpretation, a melange of rice, shrimp and vegetables topped with a fried egg and served with chicken satay on the side, brought back memories of Jakarta for me—except for one thing: We had ordered both the curry and the Nasi Goreng medium spicy but the kitchen apparently interpreted that as zero spicy, as neither dish had any bite to it whatsoever. This brings me to a common drawback to dining on “ethnic” food at big fancy hotels, which are under pressure to
cater to a broad range of guests from Kuwait to Kalamazoo. The food tries to walk a tricky tightrope of feeling exotic without seeming too weird. Yana’s menu therefore stays in familiar territory, limiting itself to the most well-known regional dishes. The only place I was stumped was the dessert menu. Sago, I learned, is the starchy pith of a palm tree, which is made into small pearls similar to tapioca for the Sago with Sweet Coconut Milk (LE 42). Neither of us being fans of tapioca, I went with the Steamed Sticky Rice in Coconut Milk (LE 45), topped with slices of ripe mango. It was a generous portion, and I enjoyed the contrasting textures of the firm, chewy rice and the soft, sweet mango. My companion got the Deep Fried Banana Fritters (LE 60), with vanilla ice cream and a drizzle of caramel sauce. It is a nice play of hot and cold, but I found the banana a bit mushy. An interesting note: If you’re planning on toasting a special occasion at Yana, be advised that you’ll only find local beers and wines amid the four-page beverage menu.) You can bring your own for a corkage fee of LE 200 for wine and LE 300 for spirits. ■
Yana
Royal Maxim Palace Kempinski First Settlement, New Cairo 2389-9000 Open daily 6 p.m. to midnight, 1 a.m. Thursdays and Fridays
Business Monthly – November 2016 I
49
Gadgets
HOME SMART HOME BY TAMER HAFEZ
I
t’s been a long day at work. As you pull up to your villa, the hallway lights turn on and the front door opens for you. The house is cool because the AC started up half an hour before you pulled into the driveway. Kicking off your shoes, you walk into the den just as the television clicks on with a new episode of your favorite show. Tap an app, and you can change the routine any way you wish. There are no servants to command, apart from your phone. You are the proud owner of a smart house, powered by a platoon of invisible staff in the form of motion sensors, computer programs and wireless communications. Home automation is nothing new in places like the United States, long the world capital of finding new ways to burn as few calories as possible. In the 1970s, homeowners could purchase
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lights that turned themselves on and off via a timer. It wasn’t enough to have coffee at the push of a button; we developed machines you set to start brewing minutes before your alarm went off. Automated security systems didn’t just scare off burglars; they called the police. By the turn of the 21st century, universal remotes were the size of paperbacks. Today, it’s all on your homescreen. Tech companies have put a lot of hype into the so-called Internet of Things, which does everything from dim the lights to report a gas leak via an app. “For example, now we have the technology to run random security scenarios that make it look like someone is in the house when there isn’t,” says Marco Gaballah, founder and CEO of Cairo-based MegaTECH Home Automation. After suffering from a series of stalls over the last five years due to Egypt’s
Business Monthly – November 2016
political climate and economic malaise, the local smart home industry is once again growing modestly. There are a handful of small, young companies in the high-end automation sector, selling and installing automation systems that purveyors advertise as reliable, hackproof and fully customizable. “We don’t just sell products; we sell an experience,” says Wael Refaat, founder and chairman of Sphere Smart Solutions. Home automated systems range from basic home security systems to fully integrated home entertainment systems controlling everything from music to the home cinema. Among his customers, Refaat says, women are usually more interested in security, while men are more interested in entertainment systems. About 50 percent of Refaat’s customers are the owners of single-family homes in
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upscale suburban areas like New Cairo and 6 October City, and the other half are residents of more established neighborhoods in town. There is also a small clientele wishing to outfit their North Coast summer homes with things like surround-sound systems in the garden. Gaballa had a customer who was unhappy with the acoustics in his garden, so MegaTech ran fiber optic cables under the lawn that enabled the owners to adjust both the light and sound levels. Another homeowner in New Cairo decided he didn’t like light switches, so he outfitted his 370-square-meter villa with 11 wall-mounted iPads to the lights, temperature, curtains and so on. “We convinced him with some difficulty to keep the switches in the bathrooms,” says Refaat. Gaballah once automated an El Gouna yacht, putting in a home theater and self-opening doors, curtains and windows, among other features. He and his technicians devised a system whereby the hardware was mounted on springs and rails to keep the technology from rocking with the sea, which “would have caused the automation to freeze due to loss of signal,” says Gaballah. On the other hand, automated systems aren’t only for the wealthy. You can put together a basic automated security system simply with out-of-thebox devices from RadioShack or websites like Air Gadgets (www.air-gadgets.com). “We have a surveillance camera that can stream video on the internet for less than LE 1,000,” says Waleed el Sayed of Sayed Electronics in 6 October City, who will send out a technician to install the camera and make sure it works. “It doesn’t take more than an hour,” he says. On the other hand, fully integrated home automation systems can cost close to LE 1 million. Either way, given rapidly changing lifestyles and technologies, Refaat stresses the importance of installing a system that is upgradable. Sophisticated smart home systems
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can be installed in one-bedroom urban apartments as well as multi-story villas with spacious gardens. “Naturally, the bigger the property, the more automation can be done,” says Refaat, adding that he’s never turned down a client because his home was too small. Even a studio can be outfitted with motion sensors and automated lighting. “Automatically switching on and off lights as you move from room to room is a smart solution that saves electricity,” adds Refaat. Gaballah advises prospective smart home system buyers to do their homework and make sure they hire a firm that carries reputable hardware brands. “Counterfeit and uncertified low-quality products are our biggest problem right now,” says Gaballah, cautioning that cutting corners by purchasing cheap, substandard devices is not a good idea. A solid automation firm should be able to work up a customized plan and include after-sales support services. Refaat notes: “Our clients want assurances that we can maintain the entire system quickly with minimum down time.” In more developed markets, smart home technology can now do everything from control air humidity levels to make ice for cocktails. In Egypt, automated home technology is still limited to a relatively small market and a limited
Business Monthly – November 2016
number of services. Effective automation relies primarily on a fast, reliable internet connection, and the country’s smart home pioneers are hoping that their business will get a boost from the advent of faster 4G, or fourth generation, mobile online service, which will enable realtime control via handheld gadgets. Around the world, real estate developers are now outfitting new residences and commercial buildings with smart technology from the get go, including details like automated sprinklers and green energy systems. Egyptian developers are now starting to catch on to this trend. Raya Smart Buildings, for example, is constructing “innovative, energyefficient and resource-saving office buildings” featuring “integrated IT infrastructure” in Cairo’s satellite cities. Still, you may want to pause before throwing away your old-school remote. While some analysts expect the market for smart devices to more than double by 2020, recent research has indicated that such forecasts may be too ambitious— sales for smart home gadgets are flatlining in certain key markets, with people complaining that the devices are too expensive for what they do. Others remain nervous about the whole idea. After all, it’s one thing to turn over your credit card number to the Internet and quite another to surrender the code to your front door. ■
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 Nevine Loutfy, Abu Dhabi Islamic Bank Egypt Omar Mohanna, Suez Cement Group of Companies
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
COMMITTEE LEADERS
VICE PRESIDENT, LEGAL AFFAIRS Said Hanafi, Orascom Hotels & Development
(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) Zeinab Hashim, Abu Dhabi Islamic Bank - Egypt
Entrepreneurship and Innovation Chair: Alaa Hashim, Egyptian Center for Economic Studies (ECES) Co-Chair: Dina Sherif, Ahead of the Curve
Capital Market Chair: Karim Awad, EFG-Hermes Holdings Co-Chair: Sharif El Akhdar, Beltone Private Equity
Corporate Sustainability and Responsibility (CSR) Chair: Mohamed El Kalla, Cairo for Investment & Development Co-Chair: Shereen Shaheen, Pepsi-Cola Egypt
International Cooperation Chair: Sherif Kamel, The American University in Cairo (AUC) Co-Chairs: Rafeh Saleh, CID Consulting Sherif El-Tokali, UNDP
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 Osama Fawzy Hegab, Triangle Trading & Engineering 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 CUSTOMS AND TAXATION
Updating the ports Smuggling is a major problem that officials are working to solve, said Customs Authority Chairman Magdy Abdel Aziz at an Oct. 9 meeting sponsored by AmCham’s Customs and Taxation Committee at the Cairo Marriott Hotel. In the last two years, said Abdel Aziz, Egyptian authorities have confiscated some 36,000 shipments of illegal drugs, “spy and warfare equipment” and food supplements, to name just a few. Customs officials’ biggest challenge in combating such illegal shipments is the difficulty sharing information electronically with other agencies like the interior ministry and the Ministry of Supply. “Individuals, ports and entry points were never linked together until six weeks ago,” he said. Before that, there was a lot of confusion at ports and other points of entry, which made it easy for smugglers to falsify documents or bribe port workers in order to bring in contraband. In August, a new electronic system was put in place that linked the Customs Authority with ports and banks to ensure that customs payments were being made in real time rather than agencies having to wait to receive paperwork from each other. “Right now, around 80 percent of information is being communicated between ports and customs points-ofentry,” said Abdel Aziz. “A completely paperless system would require 100-percent connectivity.” Officials also aim
to link the Customs Authority with the Ministry of Transport to prevent truck drivers from forging port release papers. The one-stop shop envisioned by customs authorities will go a long way toward streamlining transactions at Egypt’s entry points. Abdel Aziz hopes that a fully-linked system should be working in 12 months’ time. “It will be the solution to almost all our problems,” said Abdel Aziz. “We already have significantly more control over smuggling than we did before.”
TRANSPORT AND LOGISTICS
Looking ahead
The AmCham Transport and Logistics Committee sponsored a roundtable meeting and interactive discussion Oct. 3 featuring guest speaker Yasser El Naggar, principal deputy minister for planning, monitoring and administrative reform at the Ministry of Planning. The purpose of the meeting was to review and discuss the government’s Vision 2030 economic development plan in terms of transport and logistics. El Naggar said that sustainable economic development projects, which balance Egypt’s current and future needs, are the core of the government’s agenda. He added that Egypt’s economic and social problems cannot be solved by the government alone; it is important to have a dialogue between the government and the
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private sector, which can play a key role in creating a coherent policy framework and effective support measures for development, especially in the transport and logistics sector.
Member News MAJID AL FUTTAIM In partnership with the Egyptian branch of the Canadian Cardiac Centre and Andalusia Hospitals, Majid Al Futtaim sponsored its annual regional health awareness campaign, Feel the Beat, at the City Center Maadi and City Center Alexandria malls. The effort aims to raise awareness about cardiac health and the importance of exercise. Visitors were offered complimentary tests of health indicators like blood pressure, blood sugar and body mass index administered by medical professionals.
ORANGE For the second year in a row, Orange Egypt, in collaboration with the National Council for Disability Affairs, honored special-needs students (hearing-impaired, deaf and blind) who did well on their General Secondary Education exams. Orange also cooperated with the Not Guilty Foundation to sponsor a new mobile app called SKIT that aims to protect kids aged four to 14 against online harassment and bullying. Orange also joined forces with the firm Viu to bring video-ondemand services to Egypt, streaming Arabic, Hollywood and Bollywood movies as well as TV shows and songs.
ABU DHABI ISLAMIC BANK Global Finance, a banking and financial services publication, has presented ADIBEgypt with its Best Islamic Financial Institution 2016 award. The prize is part of an annual competition that ranks the performance of Islamic financial institutions around the world. ADIB-Egypt has received other awards in the past from similar publications such as Islamic Finance News, Banker Africa and Islamic Business & Finance News.
PROCTER & GAMBLE Procter & Gamble Egypt celebrated its regional parent, P&G Near East, being named among the four best employers out of 375 companies in the Middle East by Aon Hewitt. The largest program of its kind worldwide, the contest spanned the Arab Gulf, North Africa and Levant regions. Since its launch in 2009, P&G Near East has consistently been featured among the region’s best employers. This year’s award coincides with the company’s 30-year anniversary doing business in Egypt.
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New Members Consultancy
Power
YouGov M.E
Globaltronics S.A.E.
Address: 115 Al Thawra Street (Al Ahly Bank Building), Floor 6, Flat 63, Heliopolis. Tel.: (202) 2418-6001 Website: www.mena.yougov.com
Address: 120, CPC Industrial Park, 6 of October City. Tel.: (202) 3864-2082/316 Fax: (202) 3864-2085 Website: www.gtronics.com
Yasser Omar Managing Director
Hany Assal Chairman
Membership Type Multinational
Industrial Machinery & Equipment Rexam Beverage Can Egypt
Changes Change in Member Company
Tamer El Kateb Plant Manager
Address: 3rd Industrial Zone, Plot 2, Street 20, 6 of October City. Tel.: (202) 3828-0910
Membership Type General
Aladdin Saba
Founding Partner, BPE Partners
Change in Company Name
Al Ahli Bank of Kuwait- Egypt (formerly, Piraeus Bank) Membership Type Associate Resident
JOBMASTER Group (formerly, JOBMASTER) Sanofi (formerly, Sanofi-Aventis)
Change in Member Title Byron Skaggs
Information Technology
Director of Office of Alumni and Community Engagement, Cairo American College
Excel Systems
Ahmed Sarhan Managing Director
Change in Company Information
Address: 197 B, 26th of July Street, Shinx Square, Mohandessin. Tel.: (202) 3305-2878 Fax: (202) 3305-5326 Website: www.excelsystems-eg.com
Address: Maadi Technology Park, Building MB1, Al-Lasilki St; El Maadi, 11435 Cairo, Egypt.
Advansys for Engineering Services and Consultancy
Membership Type General
Ahli United Bank (Egypt), SAE Telephone: (202) 2249-9700/ 500 Fax: (202) 2613-5160
Foray Capital for Investment
Non-Governmental Organizations (NGOs) Drosos Foundation
Wessam ElBeih Country Director
Address: 26 Orabi Street off Port Said Street, Second Floor, Flat 21, Maadi. Tel.: (202) 2359-7817 Membership Type Fax: (202) 2359-7819 Not-for-Profit Website: www.drosos.org
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6 Salah El Din Street, Floor 1, Flat 24, Zamalek, Egypt. Telephone: (202) 2737-8113/114 Fax: (202) 2737-8115
Manfoods Egypt
Telephone: (202) 2736-1365 /81 Fax: (202) 2736-1510
National Automotive Co. "NATCO" Telephone: (202) 3536-2716 /7 /8
Seaharvest
Address: 17, Port Said Street, Maadi; Cairo. Fax: (202) 2378-7304
New Members Affiliate Members Academic/Educational/Research & Development (R&D) Ahmed El Kalla Board Member, Cairo for Investment & Development
Consultancy
Mahmoud Mahfouz Business Development Manager, YouGov M.E
Financial Sector
Ihab Raafat Chief Operating Officer, Qatar National Bank Al Ahli (QNB AA) Hossam ElDin Mohamed Deputy CEO Consumer Banking & SMEs, Al Ahli Bank of Kuwait- Egypt Sherine Balbaa Head of Corporate Banking- Alexandria & Delta, Al Ahli Bank of Kuwait- Egypt
Food & Beverages
Radwa Medhat Scientific and Regulatory Affairs Manager, Nestlé Egypt
Industrial Machinery & Equipment
Sherif A. El Agwany Finance Manager, Rexam Beverage Can Egypt Bassem Thabet HR Manager, Rexam Beverage Can Egypt Mohamed Sabry Supply Chain Manager, Rexam Beverage Can Egypt Mohamed Sedky Sales Director Middle East & North Africa, Rexam Beverage Can Egypt Mohamed Hergli Vice President Government Affairs & Policy, Tunisia & North East Africa, General Electric International Operation
Information Technology
Ehab Ahmed Chief Strategies & New Revenue Stream- Alkan CIT, Alkan Holdings
Pharmaceuticals/Medical/Health
Hisham Kenawy Managing Director, Ghalioungui Trading, Ltd. Sara Kenawy Shareholder & Partner, Ghalioungui Trading, Ltd. Bahaa-Eldin Abdellatif Shareholder, Ghalioungui Trading, Ltd. Noureldin Abdellatif Shareholder & Board Member, Ghalioungui Trading, Ltd. Shehabeldin Sayed Ahmed Shareholder & Partner, Ghalioungui Trading, Ltd.
Petroleum
Ayman Abbas Managing Partner, Intro Group
Power
Abdullah Assal Deputy CEO, Globaltronics S.A.E.
New Replacements in Member Companies Hanady Aad Salem
Marketing & CRM Manager National Automotive Co. "NATCO"
Mariam Salib
Purchasing & Facility ManagerCoca-Cola Egypt - Atlantic Industries
Jean Marc Harion
CEO - Orange Egypt for Telecommunications
Ahmad Touni
CEO - Smart Villages Co.
Category: Affiliate Sector: Automotive
Category: Affiliate Sector: Food & Beverages
Category: Affiliate Sector: Service Providers
Category: General Sector: Real Estate
Legal Services
Yasir ElAkhdar Senior Associate, Zaki Hashem & Partners Muhammad Ali Partner, Matouk Bassiouny
For any change to contact information, please contact the Membership Services Department at the Chamber’s office Tel: (20-2) 3338-1050, ext. 0016 – Fax: (20-2) 3338-1060 E-mail: membership@amcham.org.eg
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Announcements Jobs AMCHAM RECRUITMENT CENTER Code
Vacancies
Company Name
103974 104291 104351 104393 104407 104301
OD Supervisor Treasury Supervisor Sales Manager Services Delivery Manager Branch Manager Administration Supervisor
E - finance Saint Gobain Glass Egypt Luna Group Advanced Computer Technology - ACT Arab Investment Bank - AIB Pyramids Cosmetics Company
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
Rehabilitation/ replacement of the public address system serving Cairo second Egyptian Co. For the Metro Management & metro line. Tender documents are to get from the Company's offices at Operation [ Ex Cairo Metro Operation Agency ] Hammamat El Qobba Metro Station. Ref. 38/ 2016. Two tenders for the supply of (a) one rescue crane among other vehicles includ- Egyptian Airports Co. - New ing 5 minibuses of brand name, six double cabin vehicles, other three 4 x 4 double cabin vehicles, 5 limousine vehicles & other 5 microbus vehicles of Japanese brand, also (b) the annual requirements of rubber tires. Bid bond for the for the firs tender is specified in tender documents & that for the second tender is L.E. 60,000. Ref. 11 & 12/ 2016/ 2017.
Beneficiary Sectors
Bid bond Specs fees
November 16, 2016
70,000 LE LE 10,000
November 16&17, 2016
10 % each LE 2,000 each
Sectors Information & Communications Technology Transport Automotive Airports & Ports
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.
Rania Mekhail
2797-3487
Mai Abdelhalim
2797-2146
November Dental
Greater New York Dental Meeting 2016
www.gnydm.com December
Energy
PowerGen
http://www.power-gen.com/
For more information about these exhibitions, please contact: The Commercial Service at the U.S. Embassy Tel: (20-2) 2797-2330/ 40 - E-mail: office.cairo@trade.gov *Please refer to the Commercial Service at the U.S. Embassy for any updates on the exhibitions.
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Classifieds Benefits ARAB MISR INSURANCE GROUP | GIG Arab Misr Insurance Group | gig, has the pleasure to provide AmCham members a 25% discount on Travel Care Insurance Rates. Below is the required documents from members, to be sent to the contact person email: * Passport copy * Valid membership card * Duration of travel * Phone number and the nearest branch
***Discounts will be granted for AmCham members upon presenting their AmCham 2016 membership card*** For more information, please contact: Nadine Yousri Phone: (20-2) 2451-7620/22/44 Ext. 324 E-mail: yossry.n@gig.com.eg; miscellaneous@gig.com.eg Please visit AmCham Cyberlink on http://www.amcham.org.eg/cyberlink for more information for AmCham benefits This offer is valid until December 31, 2016
SMG ENGINEERING AUTOMOTIVE CO. SMG Engineering Automotive Company is pleased to offer an exclusive benefit to AmCham member companies, on maintenance service rates & Body Shop works/repairs in SMG Service Centre in Ard El Lewa. Up to 20% Discount on Spare Parts & Labor for KIA, SEAT, Mercedes and SsangYong Car Owners Maintenance service: *15% discount on spare parts, and a 15% discount on labor for KIA car owners *10% discount on spare parts, and a 10% discount on labor for SEAT car owners *20% discount on spare parts, and a 20 % discount on labor for Mercedes Benz car owners *15% discount on spare parts, and a 15 % discount on labor for SsangYong car owners Body Shop works/repairs: Members’cars accident covered by insurance, EASC (SMG Engineering Automotive Co.), will endeavor its best efforts to negotiate the best terms between the parties. Members’cars accident that do not hold an insurance cover, SMG will provide its best rates and in addition will provide 15% discount on the bill before sales tax. * HR letter is required from the member company for the employees who do not hold a membership card
***Discounts will be granted for AmCham members upon presenting their AmCham 2016 membership card*** For more information, please contact: Ramy Raouf•Phone Number: (20-2) 3709-4500 Mobile: (20 -12) 2000-0649•Email: info@smg.com.eg
zzzz HILTON RAMSES Ramses Hilton has the pleasure to offer a 20% Discount on Food & Beverages at any of the hotel's outlets: -Mahaharaja: Authentic Indian Restaurant - For the third consecutive year, Maharaja has won 'Best Indian Cuisine' 2016 by cairo360.com -Citadel Grill: Mediterranean Grill -Terrace Cafe: All day dinning International restaurant overlooking the Nile -Sherlock Holmes: Traditional English Pub -Garden Court Cafe: Offering Oriental & International light meals -Breezes: Poolside Lounge & Grill overlooking the Nile *The 20% discount is also applicable to local alcoholic beverages. AND a Special room rates: LE 720 single and LE 770 double
***Discounts will be granted for AmCham members upon presenting their AmCham 2016 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 27, 2016
THE NILE RITZ-CARLTON, CAIRO The Nile Ritz-Carlton would like to extend exclusive benefits to AmCham members. - 30% discount on food and beverages (excluding alcoholic beverages) in all of The Nile Ritz-Carlton restaurants up to a maximum number of 4 guests. The offer does not apply to banquets or large organized events. - 50% discount on City Resort membership for AmCham families. Up to a maximum of 99 memberships – first come first served. - 30% savings on spa treatments excluding products for AmCham members and up to one guest with the member in attendance. Conditions as follows: • The offer does not apply to banquets or large organized events. • Offer is not applicable on corkage charges. • Offer is not applicable on alcohol and tobacco.
***Discounts will be granted for AmCham members upon presenting their AmCham 2016 membership card*** For more information, please contact: Restaurants Reservations•Phone: (20-2) 2577-8899 Ext. 2002 E-mail: rc.cairz.restaurants.reservations@ritzcarlton.com
Please visit AmCham Cyberlink on http://www.amcham.org.eg/cyberlink for more information for AmCham benefits
Please visit AmCham Cyberlink on http://www.amcham.org.eg/cyberlink for more information for AmCham benefits
This offer is valid until December 31, 2016
This offer is valid until December 31, 2016
The BUSINESS MONTHLY Classifieds section is open exclusively to AmCham member companies. Text ads are £E 150 for up to 30 words, £E 5 per additional word. Abbreviations, phone numbers and e-mail addresses count as one word. Display ads are £E 100 per cm in height, per column (max. 20cm in combined total height). Discounts are offered for regular advertisers and repeat bookings. Insertion orders, payment and ad content must be received by the 15th of the month preceding publication. All classified ads subject to editorial approval. For more information, or to place a classified ad, contact Amany Kassem at (20-2) 3338-9890, fax (20-2) 3338-0850, e-mail: akassem@amcham.org.eg
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Advertorial NESPRESSO
OPPO
To satisfy evolving demands in the Egyptian market, Nespresso is introducing a new coffee machine, the Aguila 220, which is smaller than the Aguila 420, and is designed to meet the needs of hotels, restaurants, cafés and bakeries. Its robust brewing unit means it can serve up to 4,000 cups of coffee a month. Two extraction heads allow for simultaneous and fast beverage preparation during peak hours.
OPPO has launched the latest addition to its F-series mobile phones. The photography focused F1s are on sale in Egypt for LE 4,499. The F1 offers exquisite camera features and advanced technologies to ensure that users capture every moment in stunning detail. Customers can buy the device on OPPO Egypt’s website, Facebook page or from select local retailers, including SKY, 2B Computer, Raya and B-Tech. For a limited period, customers who purchase their new F1s at City Stars mall will receive a bonus launch-day gift pack, including a selfie stick, Bluetooth earphones and a 16 GB memory card.
AL AHLI BANK OF KUWAIT – EGYPT
GENERAL MOTORS
As part of its Corporate Social Responsibility efforts, Al Ahli Bank of Kuwait – Egypt has donated money to the Egyptian Ministry of Social Solidarity to support the reconstruction of Ras Ghareb, a city on the Red Sea that was massively damaged by devastating floods that destroyed most of the city’s utilities.
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General Motors Egypt held its first-ever Technical Excellence Centers contest last month in cooperation with Al Mansour Automotive. The contest aimed to motivate and enhance the skills of the 180 technicians and engineers working in Al Mansour Automotive service centers nationwide. Last month also witnessed Global Safety Week, which is meant to stress the importance of safety. It encouraged employe es to stay safe in their work and personal lives.
Advertorial RAMSES HILTON
SOMABAY
The Ramses Hilton celebrated the opening of Breezes, its newly refurbished poolside lounge and grill. Breezes overlooks the Nile, serving Oriental dishes, cocktails and shisha pipes. The new lounge has an infinity bar and a heated pool and features outdoor and indoor seating areas.
Last October, Somabay hosted two pop bands from the 1980s and 90s, Ace of Base and Modern Talking. Red Sea Governor Ahmed Abdullah attended the concerts to show his support for the resort’s initiatives aimed at promoting international tourism in Egypt. The shows followed last January’s Dire Straits “Experience” concert. Also in October, Somabay inaugurated its 18-hole Cascades Championship Golf Course, which will become part of the Somabay Golf Trophy, a tournament that has taken place the past 12 years.
AXA LIFE
WESTIN HOTELS AND RESORTS
Celebrating its one-year anniversary, the Commercial International Life Insurance Co. has been rebranded AXA Life Egypt, a division of the AXA Group, which serves more than 100 million customers in 64 countries. The newly named firm will cater to some 500,000 people and corporate customers in Egypt. Over the last year, the company collected LE 1 billion in premiums, mainly from institutional clients in the Suez Canal development area.
Westin Hotels and Resorts, part of Marriott International, has opened The Westin Cairo Golf Resort & Spa Katameya Dunes in New Cairo. Owned by New Cairo for Real Estate Investment Co., the new resort and spa is located in the residential community of Katameya Dunes. The complex has a 27-hole golf course with 135 guestrooms and suites.
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Media Lite
A Glance At The Press
“You’re on your own, mate.”
Al-Masry Al-Youm, Sept. 5 Media Lite is a satirical review of items published in the local and international press. All opinions and allegations made in them belong solely to the original publications and no attempt has been made to ascertain their veracity.
PRIMAL SCREAM
In a stroke of advertising genius, a Cairo bookstore opened a private Scream Room, offering its young, largely unemployed clientele a unique way to vent their frustrations—free for the first 10 minutes. The manager at Bab El Dunya (The World’s Door) got the idea after a customer jokingly suggested that it would be the perfect use for a soundproofed room at the back of the shop that was being used as an occasional practice space for bands. Reuters, CNN and The Guardian were just a few of the media outlets that subsequently published articles about the Scream Room, which owner Heidi Radwan has confidently labeled the Middle East’s first. One journalist even cited a 2015 study by Canada’s Laurentian University on how shouting has been used as therapy in some cultures. Among traffic-addled, cash-poor, pollution-soaked Cairenes, the Scream
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Room was an instant hit. “It's more popular than our books," said Radwan. Various media, Oct. 12
GREASING PALMS
As if Egyptian tour guides didn’t have it hard enough, Chinese tourists who visit the pyramids or sail down the Nile have taken to tipping with tiny tins of mentholated balm instead of cash. Ye Sanshe said the friendly Egyptians who gave him directions and served him tea on his recent six-day tour went crazy for the coin-sized pots of Tiger Balm, as the general-purpose ointment, sometimes used for aches and pains, is commonly known. Meanwhile, Egyptian hospitality workers, confirming they receive tons of the all-purpose ointment on a regular basis, don’t have a clue why the Chinese keep handing it to them or what to do with it. Ye’s guide said he’d received “tens of thousands” of the tins. The Wall Street Journal, Oct. 10
Business Monthly – November 2016
BITTERSWEET
Police arrested a man last month and charged him with intent to distribute sugar. In light of a nationwide shortage of the sweet stuff, officials limited Egyptians to two kilograms per person. Apparently, that news somehow didn’t reach the alleged dealer, who told the authorities the sugar was for his family’s café. But prosecutors said the 10 kilos he was carrying “exceeded possession of amounts reasonable for personal use,” and accused him of attempting to profiteer by reselling the sugar at an inflated price. He was eventually released on LE 1,000 bail, but the authorities announced they were setting up a tip hotline for citizens to report suspicious sales of sugar and rice. Perhaps soon we’ll have candysniffing dogs and a red-light district of bakeries. Ahram Online, Oct. 16
TABEEB LOAN
from arab african international bank “Tabeeb Loan” from Arab African International Bank is designed especially for the medical professionals sector, namely doctors, pharmacists, pathologists, physiotherapists and dentists. “Tabeeb Loan” programs offer several financial solutions with simple procedures and flexibility to suit medical professionals’ needs both personal & professional. The programs enable medical professionals to buy medical equipment or do necessary renovations to their clinics and laboratories.
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