Since the beginning of 2009 and in the context of the series of events hosted by the Canada Egypt Business Council aiming to shed the light on the impact of the global economic crisis on different business sectors in Egypt, The Canada Egypt Business Council “CEBC” hosted the year’s last event, featuring keynote speaker H.E Rachid M. Rachid, Minister of Trade and Industry, together with Mr. Aly Moussa, Chairman of the Commercial Chamber of Cairo and Mr. Galal Al Zorba, Chairman of the Federation of Egyptian Industries who shared the panel with Minister Rachid.

More than 200 prominent guests from CEBC members, government officials, ambassadors and ministers including H.E. Dr. Osman Mohamed Osman, Minister of State for Economic Development, H.E. Dr. Ahmed Darwish, Minister of State for Administrative Development, H.E. Dr. Yousri Al Gamal, former Minister of Education were among the attendees of the event.

The discussions focused on the latest impact of the economic crisis on the different business sectors in Egypt, as well as the practices undertaken by the state to move the Egyptian economy out of the eye of the global economic storm.

Mr. Raslan, Chairman of CEBC started his speech by stating that Egypt’s economic and business landscapes have changed dramatically in the year since the start of the global economic turmoil. He also affirmed that due to the crisis negative impact, billions of dollars have been pumped in organizations and financial institutions as a rescue packages that may put an end of the crisis horizons. However, he added, a significant amount of organizations and banks have increased the numbers of laid off workers, which has in fact reduced the standards of living and ability of consumption of a considerable amount of people leading to a real crisis to start.

A wider negative effect has been profound in sectors like tourism, oil and gas, Suez Canal revues, owing to international trade deceleration, besides the global declines were reported in both foreign and domestic investments due to deterioration in access to credit and capital markets.

Mr. Raslan delved into the role of the state and specially the ministry of Trade and Industry in surmounting the ominous consequences of the crisis on the vital sectors of industry and trade that represent the backbone of the Egyptian economy. He then gave a brief on Minister’s Rachid accomplishments since taking over the duty of the ministry, adding that despite the many grave challenges his dual portfolio had entailed, His Excellency managed successfully to accomplish many triumphs by his ability to achieve harmony in the interrelated economic policies.

Raslan finally acknowledged that hosting such events come from the Council’s enthusiasm to keep its members and the business community updated with the state’s vision as well as the government’s plans inline with the global financial crisis besides highlighting some of the problems that impede the process of trade exchange between Egypt and Canada.

The CEBC chairman then gave the floor to Mr. Galal El Zorba, Chairman of the Federation of Egyptian Industries, who underlined in his speech the importance of the reform moves pursued by the government of Egypt during the last four years, which he affirmed, have highly contributed in increasing investments in the economic sector.

Mr. El Zorba further pointed out that the support programs put forward by the ministry of Industry and Trade together with the Industrial Modernization Program have helped immensely to bring about change in the reality of the industrial and export sectors in Egypt leading to a prompt recovery in the Egyptian economy.

During his speech at the event, Mr. Aly Moussa, Chairman of Chamber of Commerce in Cairo, called for the spreading of the culture of work and informing laborers and personnel of their rights and duties. “It is our main aim at the Chamber of Commerce together with the Ministry of Industry and Trade to provide technical vocational training programs”.

Mr. Moussa also highlighted the significance of the actions that have been undertaken towards the establishment of trade centers in different governorates, indicating that there are around 33 centers, which is a very modest number compared to 270 centers in Turkey.

Minister Rachid, then started his keynote speech by underpinning the supportive measures taken by the state and stimulus packages offered, materialized in pumping 15 billion pounds for backing sectors affected by the financial crisis. “This had a major impact in bringing about positive improvements in the performance rates of several sectors”, he added.

He further explained that when the crisis began, it was hard to predict how the circumstances would develop, principally in the markets that are significant in terms of trade and investment. Conversely, he said, as time passed, it turned out that there was a difference between facts and predictions.

He also affirmed that the state’s stimulus package had resulted in increased investment in infrastructure in particular, and provided help to exporters and new investors. “It had a very positive effect, in terms of growth and investments, the expected fall in exports was by around 20 percent; nevertheless, the rates of decline fell by only 6 to 8 percent”, the minister elaborated.
“Over the past fiscal year, our growth rate stood at between 4.6 and 4.9 percent, as in spite of drop in foreign direct, they were compensated by increased local investments”, said the Minister.
Minister Rachid also mentioned that the Government’s previous policies in implementing economic reform programs have boosted the economic growth rates, to reach 7.7 percent before the global financial crisis. However, and in spite of the negative repercussions of the crisis on the Egyptian economy, the growth rates managed to reach a level of 4.9 percent during the current year, which represents a good indicator compared to growth rates of a large number of neighboring countries.
Moreover, Minister Rachid highlighted that the government’s plans for expansion in construction activities earlier had played a major role in refreshing the Egyptian construction sector leading to increasing the consumption growth rates of iron and cement in some months up to 32 percent, which did not happen in any country in the world during the crisis period.

He added that the coming period needs further reforms to achieve growth rates of 7 to 8 percent to ensure the provision of more employment opportunities, which will not come except by raising the competitiveness of Egyptian products and increase productivity as the only way to achieve higher growth rates. “This is particularly under constant rates of investment that reached this year 40 billion pounds, of which 15 billion the government had pumped and 25 billion pounds realized from the private sector”, said Minister Rachid.

The minister also indicated that the Ministry has an ambitious plan to develop and modernize the Egyptian standards in line with the European specifications to create a new generation of specifications to allow for improved competitiveness of Egyptian products. Moreover, he explained that the manipulation by some importers in the certificates of origin is an offense punishable by law and that these listed products are considered contrabands.

Minister Rachid declared that the ministry had participated for three consecutive years in offering training programs for around 400 thousand workers in various industrial fields and in accordance with requests demanded form many industrial sectors. He affirmed that the Industrial Training Council provides excellent training programs that are internationally certified. The Minister further mentioned that recently the Council has sent a group of young Egyptians to AC Milan for receiving training courses on a number of areas including furniture, jewelry, and fashion in order to create a new generation of Egyptians designers and innovators in several industrial sectors.

Moving on to the trade and investment relations between Canada and Egypt, Minister Rachid said that recent discussions have been made between Egypt and Canada to reach a free trade agreement (FTA) between the two countries, pointing out that this major issue was highly underscored during the recent visit of Canada’s Minister of Foreign Affairs to Cairo. He added that bilateral discussions would be further executed on the sidelines of the World Trade Organization meeting, meanwhile he confirmed that the ministry is studying the agreement signed between Canada and Jordan and its impact on the Jordanian market for guidance.

The Minister finally stressed on the importance of Canada as a great, diversified economy and a broad market expressing the state’s keenness on studying Canada’s FTA file for the welfare of both parties, elaborating that this issue has become a major concern on the agenda of the Ministry of Trade and Industry at the time.

The Minister of Trade and Industry together with Mr. Moussa and Mr. El Zorba proceeded then to answer questions posted by the audience on a number of topics covering the strategy for developing vocational training, Free Trade Agreement between Canada and Egypt especially in the Ready Made Garments sector, the economic landscape in Egypt prior to the global crisis in terms of market role versus state role, and the support offered to export associations specially the Export Bank of Egypt and Export Credit Guarantee Company of Egypt.