Chairman (Club d’Affaires Franco-Egyptien)

Club d’Affaires Franco-Egyptien; we can translate this as Chamber of Commerce.

Yes. The French-Egyptian Chamber of Commerce.

Is this independent or linked to the Economic Department of the French Embassy. How does it work?

This is an organization that groups around 400 members who are French and Egyptian companies that have an interest in promoting French-Egyptian commercial, financial, and investment relations. So, if you will, it’s a private grouping under the authority of the ministry of Social Affairs here and, because of its nature, keeps very, very close touch with the Mission Economique which is the commercial section of the Embassy here. Very close touch with a network of French chambers of commerce overseas and in France. It does various activities to promote economic ties between the two countries. We have what we call committees; sectorial committees in specific areas of interest to our members and the ultimate objective of those is to be able to come up with position papers, with ideas that can be discussed and where we can lobby various Government departments and ministries to further the business interests of French and Egyptian members. We have lecture series and what we call déjéuner debat where we have prominent French or Egyptian, usually Government or top corporate people attend and give lectures to us. We try to support our members in basically two fields. One is French companies wanting to invest here and the other is Egyptian companies wanting to export to France, and Europe more generally; I say Europe because we have also participated a couple of years ago as a founding member of a Confederation of European-Egyptian Business Associations here in Egypt where we felt that it was important to have a European voice that could talk as Europeans either here in Egypt or the Egyptian Associations here talking as one voice to European institutions. We have also some activities in the sense of trying to encourage delegations who want to come here to do matchmaking or...

Also trade missions.

Trade missions, this kind of thing. So we pretty much do what a Chamber of Commerce does except we are not called the French-Egyptian Chamber of Commerce.

Among the members do you have more French or Egyptian companies?

We have about, I would say, 80 per cent Egyptian companies and we have all the major French companies that are here.

And there are more than 400 members, you say. Are you expecting this number to increase?

Certainly. We have a branch, we opened a couple of years ago in Alexandria, which has been quite successful. Alexandria, as you know, is a major center of industry in Egypt other than the fact that it is the major port. So we have had a lot of Egyptian industrial companies joining us as a result of this branch. And we have also recently been selected by the European Bilateral Chamber Association to be their representative in Alexandria. So we are playing a European role as well in Alexandria.

Now that you mention Europe, as my colleague said, we are very interested in the Barcelona Process and its development ten years after its inception. We had the chance to talk to the Ambassador of the European Commission in Egypt, Dr Ebermann, about this as well. I, therefore, would like to ask you which has been so far the impact of the Partnership Agreement which was signed in 2001 between the European Union (EU) and Egypt and came into force last summer?

Well, I think the focus has been very good and very positive for Egypt with this European relationship. What has a great impact, a very positive impact is what the EU has tried to do towards helping modernize Egyptian industry, n order to really give Egypt again a base for exporting. With the increasing unemployment issues we have here we must be a lot more professional about how we go around exporting. I think the European approach has been very much on the nose, in the sense that they said you cannot really increase exports in a big way unless you get to the root problems which is industry, issues of quality, issues of productivity. And this is what the emphasis has been put on, and I think it is a very well placed emphasis. There are obviously a lot of other programmes which are doing well. But this is what I have been most expost to. We work again as the French Chamber with the industrial modernization arm of the ministry of Industry which has gotten quite a lot of assistance from the European Union. It is one of their biggest programmes, the IMP (Industrial Modernization Programme). And we can see that it is starting to make a difference. And we can see that Egyptian companies are finding it very, very useful. I think this is the kind of programme that should be increased because it addresses the core, one of the basic cores, of the problems in Egypt. There are many other success stories in other aspects of the economy but I think the basic modernizing industry is so crucial and important for the economy and that is really what the Europeans are doing a lot of now. These programmes, I know, have life spans and may have to be either renegotiated or renewed or whatever and I know this present one is coming to an end soon. But I am quite optimistic that both sides realize that it is an excellent programme and that they will renew it and expand it.

How important is France among the European partners for Egypt?

I would say, it’s one of the major players. We as the French Chamber were one of the four founding members of this, what we call CEBA – Confederation of European Business Associations. We, together with Germany, Italy and the UK. I think, regardless of what France is doing in the Union affairs, in Europe, I think is a very active player outside Europe, in the Union. I think it is one of the major players and they have a lot of input in what is ultimately done or negotiated here.

And which would you say are the sectors with the best potential to be developed in the bilateral relations between France and Egypt?

I think the bilateral relations are quite diverse between France and Egypt. They touch on a lot of sectors. One of the characteristics of French investment in Egypt recently is that it goes all over the spectrum. Recently the big success stories have been financial, with French banks purchasing major stakes in Egyptian or mixed Egyptian-foreign banks. And you have the three major French banks here. Two of them have made major investments in the last year; Societé Générale and Calyon. And the third one BNP Paribas is poised probably in 2006 to do a major acquisition. Those have been the big ones. The gas field, although not as big as some of the other European companies is still very big and becoming very important for France in the sense that Egyptian gas exports will soon, I think this year, represent 10 per cent of total French gas imports. And this is, I think, in view of what’s happened this winter with Russia, it’s very important for European countries to be able to diversify their sources of energy. Egypt happens to be lucky in the sense that in the last few years we have discovered large amounts of gas reserves. And we have been quick in implementing the export gas liquefaction plants, etc, and hooking up with major gas and electric utilities in Europe. So, I think we are going to become more and more important in that field and more important for European gas consumers, be they Spanish, French, Italian, Turkish... Among other fields that are important between France and Egypt, you have the whole agroindustrial sector. There France has been active in giving technical advice and know-how and has been also helpful to Egyptian companies who are looking for export opportunities in Europe and that is going to continue.

And of course tourism. The main private company, Accor, is French. And the French Travel Agents Delegation was here and there is the conference about tourism in the Mediterranean in Nice in March.

Accor, is here, yes. And the Delegation was here, that’s right. I think France represents the second largest contingent of tourists to Egypt.

In the relationship between Europe and Egypt, and the Arab world as a whole we have been witnessing this issue with the cartoons. Do you think this will be just a very unfortunate episode or could it have a more important impact on the economic relations.

I tend to think that it is an issue which hit a raw nerve but which is not going to be anything permanent. I don’t know how long it is going to take but I would be of the opinion that it is going to calm down rather quickly. There is also an impression that’s developed that there was may be an overreaction on the Arab or Muslim side. So I don’t think it’s going to have a long-term effect.

Let’s talk about the economic situation in Egypt now with the new Government in place. There have been not so many changes in the cabinet. Do you think that the present reform in the economy is going to continue?

I certainly do. What changes were made, as you are rightly said, weren’t that many in terms of number. But the people who were added to the cabinet this last time and even the switches between ministries do indicate that this reform movement is here to stay, that the leadership is backing it, that they are bringing in more younger businessmen-type ministers. I personally think we have to be careful because some of these ministers are not necessarily technocrats or technically-oriented for the particular ministries. They have to be well surrounded by good advisers, by good consultants and what have you. But I do think the reform is not going to be slowed down. It was a long time coming and it started off with the customs duties reductions with the incomes tax reductions, those were major steps. The whole opening of the economy towards foreign investment, towards privatization that is not going to stop. On the very positive side, I think we are certainly going ahead towards more transparency, more serious attempts at fighting corruption. All this we are going to see in the next couple of years. So I am quite convinced that the whole reform movement is becoming quite well entrenched. You had not just the actions taken, policies taken... but also the state of mind that had existed in Egypt for many many years, since the sixties, since we had a socialist type outlook. That state of mind and the whole public sector dominance of the economy until quite recently was, I would say, still in the majority. It was the overwhelming state of mind. And now we are seing signs of this progressively and quite efficiently broken down. So I think it is quite positive that the economy is becoming more private sector oriented, more profit oriented, more efficiency oriented. All those thing that were ignored for many years.

Let us talk now about the strong cultural links between France and Egypt. To what extend do you think that these common cultural links do facilitate doing business together and the economic environment among the partners.

France is very well known in Egypt as Egypt is in France. But that has always been a feature, in other words, you have never needed to explain to an Egyptian businessman or client or whatever where is France and what do they do and how do they do it. So there has always been a reservoir of basic acknowledgement and knowledge and appreciation in most cases. It has been in on the whole very positive. So I would say it does help. In other words, it allows you to go beyond the initial introductions very quickly and not have to explain a lot of things that you would if you were, let’s say, representing a company from Tanzania or Ukraine or Uzbekistan or somewhere else. France is a very well known commodity in Egypt. Which is no the case in many other countries. We are involved; we have been discussing and are in the process of launching a campaign to promote the image of France in Egypt. And it is a campaign that it’s going to be done with media, with written media and television, and French government sponsorship and some French companies sponsorship here. And we were discussing that at a meeting the other day and the Economic Counsellor said now be careful, because I have done this before in other countries in Asia where there is very little prior knowledge of France. Here that’s not the case, here our target audience is the middle and upper management Egyptian businessmen and we will find out very quickly that there is a lot we don’t have to do or say about France because a lot is already known but we will have to target the whole campaign in a special way to target that. So I think this answers a little your question. It certainly helps but you don’t have to take it for granted either.

Mr Younes, before we end our conversation, tell us a little about yourself. Since when have been in this position as Chairman of the chamber?

I have been Chairman of the chamber just for the last eight months. Since June. Before that I was Secretary General for the chamber for two years. Before that I was on the Board of Directors of the chamber for two years. I worked back in Egypt for the last 25 years in this family owned business where we principally work with French exporters in the fields of water treatment, pipes for water, plate-tin paper, equipment for renewing and building railway tracks. So I thought it would be interesting to get involved in the chamber business a few years ago and I hope to be able to continue my mandate which ends in June 2007. Before that I was working for an American international bank out of New York for about ten years. Before that I was in University in the United States.

Is there a personal message you want to convey to our readers, all people interested in Egypt and doing business in Egypt?

I think my personal message would be: it’s high time to take another look at Egypt. Because things have been changing very much in the last few years. Do come and see with an eye towards investing. Because Egypt for European investors offers number one, the proximity, the inexpensive labor and the access to export markets out of here where Egypt has very advantageous terms of trade and customs duties exemptions. All up and down East Africa and all of the Middle East. We have extremely advantageous things which a French manufacturer would have not access to exporting out of France in addition to a rapidly improving investment climate. So it makes a lot of sense to look at opportunities here to manufacture in Egypt for export to these markets.

Mr Younes, thank you very much for this final message and for sharing your views and opinions with us.

Club d'Affaires Franco-Egyptien

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