The Promise of an Ancient Power – Aired March 2010
Over the last 7 centuries, the area that is today known as the Arab Republic of Egypt, has continuously played a significant role in global affairs. From the Pharonic to Coptic, Byzantine, Roman and Islamic ages, some of the most advanced civilisations in history have called this region home. The temples of Luxor, the tombs of Aswan and the pyramids of Giza, to name but a few of its more famous historical sites, are impressive reminders of the country’s heritage.
Located in the northeast corner of Africa in the modern world, Egypt today is bordered by Libya to the west, Sudan to the south, and Israel, the Palestinian Territories and Jordan to the northeast. The country also boasts an extensive coastline, with the Mediterranean Sea to the north, and the Red Sea to the east. This excellent geographic location has enabled Egypt to play a central role not only within the Arab world, but also internationally, acting as a link between Asia, Europe, Africa and the Middle East.
This central position has resulted in a culturally and economically diverse nation. With a population of about 75 million people, Egypt is today the mostly densely populated nation on the African continent, and is a bustling country with the second largest economy in the Arab world. This in itself is a key attraction to potential investors.
Apart from its excellent geographical location and sheer size of population, Egypt also offers potential investors an added incentive by way of trade agreements.
With one of the most proactive governments in the Arab world, Egypt has faced the challenges of globalisation head-on by responding directly to the needs of its growing population. By investing in infrastructure and technology upgrades, and reducing the amount of bureaucracy while increasing government transparency, the country has developed a liberal market-based economy driven by the private sector.
In 2004, the Egyptian government embarked on a far-reaching programme of economic liberalisation which has resulted in a strong and continued growth, as well as a record level of foreign investment till the recent global economic crisis.
With a view to building a modern Egypt that can boast a flexible administration, as well as a productive economy that is capable of meeting successive international challenges, national authorities have managed to harmoniously balance production, export and import. An ambitious privatisation programme in the 1990s has led to dramatic improvements in the manufacturing sector.
Furthermore, if figures that were in place before the recent economic crisis are an indication, the number of international companies that have chosen to base their operations in Egypt looks set to rise.
The finance sector in the country further serves to raise investor confidence. Restructured and consolidated over the past years, Egypt’s financial system is now transparent and solid enough to provide the country with the credit it needs to grow. In fact, the IMF has lauded Egypt’s strong balance of payments and foreign reserve positions. It is estimated that when businesses are once again ready to expand, investor confidence in Egypt will be high.
By already putting in place the necessary measures to create an economy which is business-friendly, Egypt looks set to continue to provide an environment which encourages growth and foreign investment.
The energy industry is one of the key sectors and contributors to the growth of Egypt’s economy. The energy infrastructure for oil, gas and electricity are adequate and cover most of the populated areas in the country. It also includes facilities to assist the export of energy to other countries.
With much development potential still to be found in the energy sector, Egypt is paying special attention to the industry as an engine for national development. To this effect, the industry has slowly been privatising over the years, and several companies have been formed that meet with international standards.
Formed in 1975 as a joint-stock company, PETROJET is capable of competing with foreign contractors in the industry. Over the last 30 years, the company has made considerable strides and is now the leading player in the execution of petroleum projects within the country. PETROJET has also managed to extend its presence into regional markets over the years, and is now focusing on further expanding its role in the international market. Having invested in high-calibre personnel and state-of-the-art technology, PETROJET has already developed an international reputation for quality commitment, and has received several international certificates and licenses in recognition of this.
ENPPI, established in 1978, provides fully-integrated engineering, procurement, construction supervision and project management services for the petroleum, petrochemicals, power and other related industries. Recognised as an engineering, EPC main contractor and management contractor, the company has a proven track record of accomplishments for both onshore and offshore projects. Applying state-of-the-art technology and know-how based on worldwide sources and standards, ENPPI has received several internationally-recognised certificates and continues to maintain its high status in the international engineering community.
Another successful Egyptian company in the energy field is SUMED. The company is involved in the efficient transportation of crude oil, as well as other relevant services, at competitive prices. SUMED guarantees a reliable, secure and economic route for crude oil movements from the Arab Gulf to refining centres in the West. In keeping with the latest international standards, SUMED has invested in modernising their technology and equipment used, while paying close attention to preserving the environment and maintaining safety standards.
Due to major recent discoveries, natural gas is likely to be the primary growth engine of Egypt’s energy sector for the foreseeable future. Egypt’s natural gas sector is expanding rapidly with production having increased over 30 percent in the last decade.
The Egyptian Natural Gas Company, or GASCO, was established in March 1997 to transmit, distribute and process natural gas within the country. The company is present at every point in the Egyptian gas chain and plays an important role in promoting the utilisation of gas domestically. A vital link between natural gas producers and consumers, GASCO serves a wide spectrum of industries and customers via the national gas grid, which is 16,450 kilometres long, making it the longest and largest gas distribution grid in Africa and the Middle East.
GASCO also has a leading role in gas processing and the recovery of gas valuable components such as LPG, ethane-propane mixture and commercial propane, which is then exported to the international market. In order to meet international standards and codes, GASCO pays close attention to its commitment to quality. In recognition of this, the company has been accredited with several internationally-recognised certificates over the years.
The importance of the successes achieved in Egypt’s energy sector over the past decade cannot be dismissed, but the sector will face some challenges in the future.
Despite the tough conditions, there still exist opportunities in the sector.
Tourism is one of the largest contributors to Egypt’s GDP. The industry is big business – it is one of the major driving forces of the country’s economy and the primary source of foreign earnings. Over the last 10 years, there has been a 100% increase in inbound tourism. While only a small percentage of this comes from Asia at present, authorities are upbeat about the future.
Egypt is an all-year destination, with sunshine 365 days a year, and attractions for tourists in every season. From attractive beaches in sunny coastal cities on the Red Sea including the likes of popular Taba, Sharm El Sheikh and Hurghada, to the historical cities of Cairo, Luxor and Aswan which are rich in the Pharonic tradition, the country is one of the most diverse in the Middle East North Africa region.
Egypt continues to attract tourists year after year despite the tension in neighbouring countries. It is considered an extremely safe and tourist-friendly destination, with Egyptians taking national pride in their hospitality and good nature.
Apart from leisure tourists, many business tourists also make a stop in Egypt’s capital city of Cairo. With the country’s location at the centre of the Arab world, Cairo is a convenient and preferred destination for regional business conferences. The city consistently plays host to many of the region’s public and private sector conferences and exhibitions, including many international events. In light of this business tourism that forms a substantial part of its industry, both the government and private sector have worked towards having in place a sound infrastructure in the country.
Over the last few years, there has also been much interest from foreigners to be able to own a home in Egypt. To this effect, the government has put in place legislations that allow for residential tourism.
Indeed, the plans in place for the tourism industry in Egypt point to a continued expansion of this highly lucrative industry.
Modern-day Egypt offers much to those who come to her shores – a well-established democracy, governing institutions that meet international standards, a sound financial and economic system, and a geographical location that is both strategic and advantageous. In addition, Egypt is well-connected to market demands, and presents a unique value proposition to investors. This distinctive blend of competitive strengths promises to make the country a choice location for global enterprises.