Russian-Egyptian Business Forum

Russian Entrepreneurs meeting with Egyptian Foreign Trade Minister and his accompanying official delegation

On October 12, 2006, the RF CCI hosted a meeting of representatives of the Russian business community with the Minister of Foreign Trade and Industry of the Arab Republic of Egypt, Rashid Mohammed Rashid, as well as his accompanying delegation and a number of Egyptian businessmen.

Participating in the forum were: RF CCI Vice-President, G.Petrov, Advisor to RF CCI President, RABC Director, T.Gvilava, as well as executives of Russian companies and representatives of Russian organizations interested in enhanced business co-operation with Egypt.

From the Egyptian side the Session was attended by Rashid Mohammed Rashid, Minister of Foreign Trade and Industry of the ARE, Mohammed Al-Misri, President of the Federation of CCIs for Egypt, Hisham Hassan, Chairman of the Board of Directors of the Bank for Development, as well as representatives of several branches of economy in the country (industrial engineering, agro-industrial complex, textiles, petrochemicals, energy, transportation, metallurgy).

The meeting was attended by Embassador Extraordinary and Plenipotentiary of the ARE to the Russian Federation, Izzat Saad as well as other representatives of the Egyptian Embassy and Trade Delegation in Moscow.

The Vice-President of the RF CCIs, G.Petrov, welcomed the Minister of Foreign Trade of the ARE and those accompanying him. He noted that the visit by the Egyptian delegation was more than just significant, for it closely preceded a visit to Moscow by ARE President H.Mubarak.

G.Petrov underlined that the Russian-Egyptian business ties have been dynamic over the past years – the volume of reciprocal trade in goods and services amounting to $ 1.6 billion in 2006, of which 1 billion in commodity turnover proper.

Stating that the Russian commodities exported to Egypt by far exceed those imported, the CCI Vice-President stressed the need for diversified joint effort. He expressed hope that the Forum would result in a stimulating and practical discussion of bilateral cooperation.

The Minister also stated that the political ties between the two countries have always been stable. They were given a fresh impetus by the recent visits to Cairo by RF President, V.Putin, and Chairman of the RF Government, Ye.Fradkov, as well as the visit to Moscow by ARE President, H.Mubarak. Economic ties between both countries should be raised up to the level of political relations, Rashid Mohammed Rashid said.

The Minister emphasized that Egypt is interested in enhanced trade and economic ties with Russia. As of today, the commodities turnover totals $ 1 billion 100 000, the volume of Russian export to Egypt – 1 billion, while the volume of Egyptian exportation into Russia doesn’t exceed 100 000.

He further said that the economic reforms now underway both in Egypt and Russia inspire the hope that the interaction between the Russian and Egyptian entrepreneurs will be a success in the present-day market economy situation.

Rashid Ar-Rashid informed all those present about the ongoing large-scale banking system reform in Egypt that is expected to increase both Egyptian and foreign investment and that has by now brought about a 6, 9 % growth of the country’s economy.

The Minister called upon Russian entrepreneurs to invest into Egypt’s economy. Mr. Rashid predicts an increase from the $ 45 million today to $ 250 million in the next 5 years, owing to the creation in Egypt of an “industrial zone” involving Russian technologies and capital. Among the most promising sectors are electric energy, oil & gas, textile industry, aircraft and vehicle manufacturing, spare parts production, pharmaceuticals, banking, tourism.

Head of Department for Industrial Development, Amr Asal, informed the attendees about the setting up of several special industrial zones in Egypt that are to play a key part in promoting bilateral co-operation. These areas, as of now numbering 79 and covering 20 million km2, will enjoy tax privileges. Their total area, as planned by the Egyptian Government, will take up 50 million km2.

Amr Asal proposed to the Russian businessmen to familiarize with the Presentation of a Project for the Development of Industrial Zones in Egypt. The program opens ample opportunities for industrial growth, enabling entrepreneurs and investors to either rent for as long as 50 years or purchase certain areas that they will then autonomously develop by setting up various businesses, including joint ventures. This proposal may interest Russian companies, as it facilitates the supplying of their production to markets in the third countries. Compared to other Northern African countries, the cost of labor in Egypt is the lowest, as are the costs of electricity and water, all of which is making the country increasingly attractive for investors. To quote only a few examples of successful Russian-Egyptian co-operation projects: an assembly line of VAZ vehicles (7th and 10th generations) has been opened and the manufacturing of NIVA utility cars is now being planned.

Director of the RABC, Advisor to RF CCI President, T.Gvilava, informed about the main lines in the activities of the Council and called upon Russian and Egyptian businessmen to intensify their interaction within the framework of the Russian-Egyptian Business Council, one of the RABC bilateral sub-councils.

Advisor to President of VNESHEKONOMBANK, A.Aksenyonok, drew the attention of the Egyptian delegates to the fact that inter-bank collaboration is not keeping pace with the otherwise encouraging prospects opened up in the economies. He reminded the participants of the long-debated issue concerning the reciprocal granting of banking guarantees. It is high time, he said, that this issue was moved up to the official level from what are now just inter-bank negotiations.

Chairman of the NOVATEK Board of Directors, V.Gyria, informed the meeting participants that his company is currently negotiating with the Oil Ministry of Egypt, and a Memorandum on Oil Cooperation is being prepared to be signed.

Deputy Chairman of the Coordination Committee of the Russian-Egyptian Centre, N.Levshina, informed about a number of industrial and energy projects developed within the framework of the Centre and several other projects that are being negotiated.

In the course of the meeting the representatives of the Russian companies were introduced to the Egyptian delegation, and their activities were discussed. The Egyptian businessmen, in their turn, informed about their potential of, and prospects for, establishing business ties with their Russian counterparts.

The sides discussed the expansion of Russian-Egyptian interaction in various sectors of co-operation.