 New Dimensions, New Frontiers |
After two years of strong fiscal growth, the government of Egypt has taken bold steps to strengthen the country's economic foundations and cement its prosperity. Seeking to preserve a real GDP growth rate of around 6 percent a year, Egypt has recommitted itself to privatize its lucrative telecom, insurance and banking sectors. These sales, along with increased tax collection and a booming tourism industry, will help the government release $7.5 billion in the Egyptian market this year, increasing liquidity in domestic and foreign currency.
With sound economic fundamentals established and its financial wheels properly greased, Egypt is looking beyond its borders to increase exports. As a founding member of the World Trade Organization (WTO), Egypt has embraced export-led growth as an assurance of national prosperity in a competitive global environment. President Hosni Mubarak, in his most recent annual visit to the United States, emphasized Egyptian information technology as a primary field of export, hoping to buttress Egypt's already substantial trade in textiles and agriculture.
Egypt continues to pursue a free trade agreement with the United States, and has signed a EuroMed agreement with the European Union to enhance economic, cultural and political cooperation. Its ties to developed countries remain as firm as ever, based on its strategic role in the region and its leadership in the Middle East peace process.
Once a leader in the non-aligned movement during the Cold War, Egypt maintains its role as a major player among middle industrialized countries. At the COMESA conference held in Cairo this year, Egypt looked to boost trade among the developing countries of Africa, where Egypt has a distinct manufacturing advantage. The Arab world's most populated country also continues efforts to promote an Arab free trade area over a Middle East market that would include Israel and Turkey.
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Given this strategic position, Egyptian officials point out the opportunities for Egypt as a gateway for investment. "Egypt is the doorway to the last unexploited region of the earth at the beginning of the 21st century: the Middle East, North Africa and the African continent," says Egyptian Minister of Economy and Foreign Trade Youssef Boutros-Ghali
At home, Egypt has benefited from a tourism bonanza, with revenues in this sector last year up a stunning 43 percent over the previous year. In conjunction with various international hotel chains, Egypt plans to double the number of rooms in the Sinai resorts within the next two years. Tourism revenue is expected to top a record $4.5 billion next year, making it Egypt's primary service industry.
Given these plans, a construction boom could be in the making. Major infrastructure projects, including Cairo's Ring Road, a bridge over the Suez Canal, new metro lines in Cairo and Alexandria, and the construction of a "New Valley" in Egypt's southwest, are catching the attention of international construction and engineering firms keen to enter joint projects with Egyptian construction companies.
In facilitating these projects, the most promising venture so far is the Build-Own-Operate-Transfer (BOOT) model. Particularly successful in the power sector, this model has been employed by international construction and engineering firms in building some 14 power-generating stations. BOOT will also be used in the construction of tunnels and other infrastructure projects over the next five years.
International cooperation is moving forward in the gas and petroleum sector as well. Pipelines linking Egypt with countries to the north and east are going through, attracting attention from international energy firms mindful of the country's status as a major gas supplier in the region.
All of this has fostered an accelerated investment climate. While the Egyptian Stock Exchange suffered a difficult year in 1999, off 25 percent from the previous year's high, the Egyptian market is becoming increasingly attractive as a haven from this year's vacillating international markets.
Overall, Egypt's rising fortunes are helping this ancient land receive the attention it deserves-attention built on the lure of its past, and on its prospects for the future. |
